Well, the market is now officially entering the
Pre-Christmas “Silly Season” and I am finding it harder to find what, I would
consider, to be good investment opportunities that I would want to put my name
to. I’ve been scouring the portals this morning and not surprisingly, rich
pickings are very thin on the ground.
One thing that has surprised me though is the number of
investor sales, many with tenants in situ, that are currently coming onto the
market, some offering refreshingly sensible yields to the next investor,
others, well I don’t want to use the blog to embarrass any fellow
professionals, so lets just leave it there shall we?
This situation only reaffirms the importance for
investors and sellers in general, in getting the correct market advice at the
right time. Selling assets, including property, is all about demand and having
an asset for sale at the price at the right time. The mobile sandwich company
doesn’t do deliveries to offices after 2:00pm for a very good reason; they may
have the best sandwiches in the world, made from the best ingredients, but if
you have already had your lunch and are therefore not hungry, you will not see
the value and buy!
I say to all sellers, whether they are residential or
investment sellers, it is important to have this mind-set when offering
property for sale. If you are selling a property with tenants in situ, you know
that only investors will be buying. You
should be advised that investors are a different buyer. They are, like you,
there is no heart involved in their purchase, so if you would be happy with a
gross yield of under 5%, then fine, market the property offering this level of
return.
I promise you though, and I say this to all my investor
clients, when you are selling to investors, you have to leave something in the
deal for the next investor, otherwise why should they invest? Investors are
successful people, not fools, and you do yourself no favours in the long term
in trying to sell a property with minimal yields. Remember, if you wouldn’t buy, why should
they?
The market can be a cruel mistress; I have been selling
high value assets for over 25 years and the one thing all assets/commodities
have in common is this:
“The market is the market. At no time can your personal or financial circumstances,
or indeed the value of your outstanding mortgage, have any bearing on the value
of your house!”
Anyway, the above flat is being sold by our friends at
Stuart & Stuart. It is a well
presented 2 bed flat at 7 Andrew Court in Penicuik, just off the Queensway and
it has gas central heating, double glazing and a shower over the bath (all
thing regular readers of this blog will know that I think are very important).
The property is on the market for a fixed price of
£90,000. It will rent for £600 which
gives a yield of 8%. However, the
property has been on the market for a whilst now so a cheeky wee pre Christmas
offer may secure the flat for a lower price – a price of £80,000 would get you
to an impressive yield of 9%.
If you want some advice on this property,
another property you have in mind or anything else property related, come and
see us in our office (6 Bank Street, Penicuik), give us a call 01968 674601 or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).
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