Scope for price negotiation to improve 9% yield on this Penicuik BTL property

Today’s buy to let opportunity is a 3 bed, upper villa on John Street opposite the Bank of Scotland that is being sold by McEwan Fraser Legal.  John Street is the main drag into Penicuik.

There is plenty of accommodation including a decent sized lounge, a fitted kitchen, 3 double bedrooms, a bathroom with a shower, gardens and on street parking.  The property is in lettable condition and, by the looks of the photos, it has been rented out before. Structurally there are a couple of things I would point out: one the bedrooms is a ‘small’ double (have a look at the photos and you will see what I mean!) and the fact that is an upper villa may put off some people, particularly families with small kids. 

Double click for more details of this property

Doing the maths. The price is offers over £99,995 so let’s say you will be able to get it for £105,000.  Rent of £750 to £800 pcm is achievable on a property like this in the current market which gets you to a 8.6% to 9.1% yield.  On top of this, there may be scope for a negotiation on price as the property has been on the market since March.

We hope you find our posts useful.  If you would like some advice with your potential investment, please come and see us in our offices (6 Bank Street, Penicuik), call us (01968 674601) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Values of Penicuik Terraced Houses smash through the £155/sq ft barrier

A landlord popped into my office in Bank Street the other day to have a chat about buying a property in Peniciuik.  He already has a couple of residential properties as well as a commercial unit that are doing very well for him and is on the look out for a third residential property.  When we were talking, he asked me a question that made complete sense in terms of commercial property but was as bit ‘left field’ from a residential property point of view – how much he should be paying per square foot?

Well, that was a challenge and you know how I like a challenge!

So I did my research and found out that:

• The average flats in Penicuik are currently selling for approximately £168 per square foot costing, on average, £100,000.

• Terraced houses in the town are currently selling for, on average, £120,000 or £155 per square foot.

• An average semi in Penicuik is obtaining for £162,000 and achieving £196 per square foot. 

• Finally, the average detached house in Penicuik is achieving £191 per square foot and is selling for £300,000 although this selling price is skewed by a small number of high value properties that do not make viable buy to let properties.

Now these are of course averages, but it gives you a good place to start from.

If you recall in an earlier article, my research reveals that Penicuik terraced houses tend to generate a better yield than detached and semi-detached houses (probably because they are cheaper to buy than semi-detached houses but rents as fairly similar) and flats (probably because there are not that many flats for rent in Penicuik). However, detached houses, semi-detached houses and flats tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built – remember, 29.8% of properties in Penicuik are terraced houses compared to a national average of 18.6%.

So, terraced houses are the cheapest to buy per sq ft and give the highest rental yield but give the lowest capital growth.  That’s interesting.

If you would like to explore how we can help you with your property investments, or should you require any advice about investing in the Penicuik property market, wish to enquire about our Investment Analysis Reports, Property Sourcing, Residential Lettings or Property Management services, please do not hesitate to visit the Penicuik property Blog (www.penicuikpropertyblog.co.uk), contact us for a chat (phone us on 01968 674601), come and see us in our offices (6 Bank Street, Penicuik) or email us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Modern Penicuik flat with 7% return

Today’s buy to let opportunity will be right up your street if you are looking for a modern, low maintenance property.  It is being sold for significantly the Home Report value and it has been on the market since early August 2015 so the seller may be particularly keen to sell.

The property is at 12 Bankmill View, Penicuik.  It is a well maintained, 3 bed apartment in the modern Valleyfield development within walking distance of the city centre and with easy links to the bypass, perfect for the commuting tenant. 3 bedroom apartments in this area are renting for in the region of £825-850 pcm at the moment.  This apartment has great accommodation and an allocated parking space. 

Double click here for more details about this property

This property is being sold by Allan McDougall with an asking price of offers around £145,000 which is £20,000 less than the Home Report value.  As it has been on the market since early August, you should be able to get it for £145,000.  If you do your calculations on these figures, you are looking at a potential annual return of 6.8% to 7%, which is a decent return taking into account the modern, desirable, low maintenance nature for the property.

If you would like any advice on buying a property to let, feel free to pop into the office at 6 Bank Street for a chat, give us a call 01968 674601 or email us on (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Not all Penicuik properties are right for buy to let ...... even the nice ones!

A grateful landlord was buying me coffee in Giovanni’s Cafe this morning when he asked my thoughts on this Penicuik property that has just come on the market.  I told him that I would have a look at it and get back to him in the afternoon.

The property is a 3 bedrooom, semi-detached house at 2 Mauricewood Avenue.  Mauricewood is the executive housing development at the Edinburgh end of Penicuik that regular readers of the Penicuik Property Blog will know is a very sought after part of Penicuik to live in.

The house has fairly good accommodation – a large lounge, a separate dining room, a fitted kitchen, 2 double bedrooms, 1 single bedroom, (only) a shower room, double glazing, gas central heating, a garage and gardens to the front and rear.  However, it will need a wee bit of TLC, decorating etc so let’s say you would have to spend £10,000 to get it ready for letting.

Double click here to get more details about this property

Turning to the financials.  The asking price for this property, which is on the market with Mov8 is offers over £169,995 so let’s say it goes for £180,000.  Adding in the cost of the works mentioned above gets you to a spend o £190,000.  A semi-detached house like this in this area will rent for £900 pcm.  So that gets you to a yield of 5.7%.

I am not long off the phone giving my feedback to the landlord.  I told him that I would buy the property for me and my family to live in as it is a nice house in a cracking part of Penicuik and, having older kids, we take showers not baths.  However, I also told him that I would not buy this property for renting as (i) given it’s location and size, it is costly, (ii) given the rent levels in Penicuik and the cost of this property, the returns from renting are not that great and perhaps most importantly (iii) the property only has a shower room which, by the looks of the floor plan (see above), is due to lack of size rather than the personal preference of the current owner (eg older people often swap baths for showers as they are easier to get in and out of).

However, in case he was thinking of still buying the house, I also mentioned to him that there must be a story behind this house as it was last sold only a few months ago (it was sold in July 2015 for £167,000) but it doesn’t look like it has been bought to be immediately refurbished and re-sold and said to him that finding out the story may be helpful in understanding the sellers position/mentality to selling which may give the edge in securing the house.

It goes to show that not all properties as right for buy to let ...... even the nice ones!

If you would like any advice on buying a property to let or live in, feel free to pop into our office at 6 Bank Street, Penicuik for a chat, give us a call 01968 674601 or email us on (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Flexibility on price for this Penicuik end terraced house?

The weekend is almost upon us so I thought I would leave you with a property to have a think about over the weekend.  It’s been on the market for a fair time now so there may be movement on the price.

Today’s buy to let opportunity from the Penicuik Property Blog is a fairly standard spacious two bed end terraced house with an extra box room/study at 24 Lomond Vale in Penicuik.  The property, which is in fairly good condition internally, has double glazing although it only has electric heating.

Lomond View is a pleasant cul-de-sac within a mature residential area off the bottom of Meggat Place. 

https://www.stuartandstuart.co.uk/property/36157-penicuik-midlothian

This house is on the market with Stuart & Stuart for a fixed price of £110,000.  The right tenants should pay £625 for a house like this once it has been done up so that’s a yield of 6.8%.  As I mentioned at the start of this article, the property has been on the market for a number of months now so the seller may be persuaded to accept a lower price to get the property sold.

We hope you find our posts useful.  If you want some buy to let 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), call us on 01968 674601 or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Win win for Penicuik landlords – capital growth and rental yields are higher than in Edinburgh!

In Penicuik, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read the Penicuik Property Blog that shows that the Penicuik rental market is doing reasonably well, with rents and property values rising. 

When I was having a chat with one of these landlords over a cappuccino in Cafe Marmaris the other day, he asked me two completely unrelated questions that got me thinking.  The questions were, how much faster are Edinburgh property prices increasing than Penicuik ones and how much he should be paying per square foot?

Interestingly, we both thought that obviously Edinburgh property prices would be rising faster than Penicuik property prices but, going by my mantra of ‘never assume nuthing’, I did my research and was astounded by what I found.

Over the last twenty years, property values in Penicuik have risen by 270.51%, compared to Edinburgh’s 266.48%.

This is an astounding result as it turns the historical view of the capital growth vs income see saw on it’s head.  The capital growth vs income see saw says that the higher the capital growth the lower the rental yield and vice versa. 

However, the property values research I did means that not only has capital growth been greater in Penicuik than in Edinburgh, but your investment money also goes further in Penicuik as properties are cheaper meaning there will be higher a rental yield – in Penicuik you can get easily 6-8% whereas in Edinburgh you are lucky if you get 4-5% per year.

Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Penicuik property Blog (www.penicuikpropertyblog.co.uk), contact us for a chat (phone us on 01968 674601), come and see us in our offices (6 Bank Street, Penicuik) or email us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Ready to rent, stone built 1 bed flat in Penicuik

At last, there is some much needed new blood in the Penicuik property market! 

Today’s Buy to Let opportunity from the Penicuik Property Blog is a new to the market, stone build flat that is ready to rent .... it is not often you hear these things in the same sentance as stone built properties like this are not that common in Peniciuik!

This property is a one bed, first floor flat at 16a Croft Street in Penicuik –Croft Street is just off the High Street in Penicuik down from the Town Hall.

The flat is in a stone build block and it is in a ready to rent condition having been recently refurbished.  It has a lounge with wood burning stove, a newly fitted kitchen, one double bedroom and a newly fitted bathroom with bath as well as an electric shower over the bath.  It has newly fitted floor coverings and double glazing and it has recently been re-decorated in neutral colours.  The only thing I am not sure about is the heating – the pictures show that it has a wood burning stove as well as what looks like a radiator in the lounge but do not show any other radiators and the schedule does not seem to mention heating so you should check out fairly early on what heating the property has.   

Double click here to get more details on the property 

This flat is on the market with Neilsons for offers around £79,995 so let’s say you can get it for £85,000.  The right tenants should pay £525 for a flat like this once particularly if it has gas central heating so that’s a yield of 7.4% which is good for a stone built property in this part of town. 

We hope you find our posts useful.  If you want some buy to let 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), call us (01968 674601) or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

Quality Penicuik semi detached house buy to let opportunity

Today’s opportunity from the Penicuik Property Blog is a spacious three bedroomed semi detached house 153 Rullion Road.  Rullion Road is a quality area of Penicuik. 

This property was new on the market yesterday.  Given the type of house it is and the location it is in, I would expect that this property will be sold fairly quickly so if you are interested in it, best you go and view it fairly quickly.

The property, has a lounge, a separate dining room, a fitted kitchen, three bedrooms, a luxury shower room.  It also has gardens front and rear, a long driveway, gas central heating and most windows are double glazed. 

Double click here to get more details about this property

To me it looks like an older person has lived in the property until fairly recently given that it has a shower room not a bathroom, given the age of the kitchen and by the looks of the curtains and that the property has been re-decorated and re-floored throughout to make it presentable for sale. 

It you bought this property I would recommend that you re-instated the bathroom as families want a bathroom even though they may not actually use it.  In addition, I would spend a wee bit of money getting new doors and worktops for the kitchen but I would not renew the whole kitchen.  Finally, I would get some neutral curtains.  Let’s say this work costs you £5,000.

This house is on the market with Allan McDougall for offers around £160,000.  After you spend £5,000 to do it up, that takes you to £165,000.  You should get a rent of £825 for a house like this so that’s a yield of %.  Given that it is a quality part of Penicuik, that’s a reasonable return.

We hope you find our posts useful.  If you want some buy to let 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), call us on 01968 674601 or email either of us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

34% of Penicuik Tenants’ Salary goes on Rent

The subject of the affordability of renting in Penicuik came up in a conversation I had with a Penicuik landlord the other day and how that would affect tenant demand. Everyone wants a roof over their head and, since the Second World War, owning one’s home has been an aspiration of many Brits.  However, with rents at record highs, many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the Help to Buy ISA, where the Government will top up a first time buyers deposit.

Therefore, I thought I would do some research into the Penicuik property market and share with you my findings. Penicuik tenants spend on average just over a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Penicuik is £750 per month.  When the average annual salary of a Penicuik worker stands at £26,572 per year that means the average Penicuik tenant is paying 33.9% of their salary in rent.

You see one the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a severe lack of new properties being built in Penicuik.  It’s the classic demand vs supply scenario, where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also, Penicuik people aren’t moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, a few weeks ago I said since Autumn 2007 the number of properties for sale in Penicuik has declined year on year.

So, the planners in Penicuik haven’t allowed enough properties to be built in the town and existing Penicuik homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Penicuik to match demand, these are the reasons houses prices in Penicuik have remained quite buoyant, even though economically, over the last 5 years, it was one of the worst on record for the country and the Midlothian as a whole.

However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey (their Generation Rent 2015 Survey) suggested more and more people may be long term, if not lifelong, tenants. In fact there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45.  It seems from this survey that the state of the UK economy has shifted priorities quite significantly in quite a short space of time.  With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people were seeking rental properties.

It is often said that more people in central Europe rent for longer or never own their own property. The last two census in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and, as a country, we are becoming more and more like Germany.   That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays, often quoted, is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that, they have a higher personal income than in the UK.

Therefore, if we are turning into a more European model and the youngsters of Penicuik and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Penicuik tenants as wages will start to rise and good news for Penicuik landlords, especially as property values in Penicuik are now 2.1% higher than year ago!

Whether you are a landlord, a ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Penicuik property Blog (www.penicuikpropertyblog.co.uk), contact us for a chat (phone us on 01968 674601), come and see us in our offices (6 Bank Street, Penicuik) or email us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

A Penicuik property opportunity that needs a bit of modernisation

For those of you who are looking for an investment property in Penicuik why take a look at this property below. I personally think it would make a good buy to let investment if you’re looking to add to a rental portfolio or looking as a first time investor. 

Today’s Buy to Let opportunity from the Penicuik Property Blog is a fairly standard spacious two bed mid terraced house at 5 Anne Street in Penicuik with gas central heating and double glazing. 

Anne Street is on the boundry between the Rullion Road and the Queensway parts of Penicuik. 

The house is a wee bit tired, particularly the kitchen and bathroom, and so needs some work to make it rentable.

Double click here for more details on this property

This house is on the market with Allan McDougall for offers around £110,000.  It’s been on the market since October 2015 so there may be some movement on the price – let’s say you can get it for £105,000.  You may want to spend a bit of money doing the property up, let’s say £5,000.  The right tenants should pay £625 for a house like this once it has been done up so that’s a yield of 6.8%. 

We hope you find our posts useful.  If you want some buy to let advice on this property, another property you have in mind or anything else property related, call us on 01968 647601, come and see us in our office (6 Bank Street, Penicuik) or email us (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

New Year lower villa investment opportunity in Penicuik

Today’s buy to let opportunity is a new to the market 2 bed, lower villa on John Street just along from the Angle Park Garage corner that is being sold by Allan McDougall.  John Street is the main drag into Penicuik.

There is plenty of accommodation including a decent sized lounge, a modern fitted kitchen, 2 good size double bedrooms, a well presented wet room, gardens and on street parking.  The property also has double glazing and central heating. 

By the looks of it, this property has been modified to make it more suitable for an older person eg wet room instead of a more traditional bathroom, easy flush handle on the WC.  Most of the modifications are fine from a letting point of point of view other than possible the wet room.  As readers of the Penicuik Property Blog will have heard me say before, having a bath is preferable as families really need a bath and others like a bath even though they will hardly ever, and possibly never, use a bath.  Having a wet room will reduce the number of people interested in renting the property but you should still get it rented with a wet room particularly as it is only 2 bed property that is likely to attract fewer families.

Double click here to see more details of this property

Doing the maths. The price is £90,000.  Rent of £600 pcm is achievable on a property like this which gets you to a 8% yield.

If you would like any advice on buying a property to let, feel free to pop into the office at 6 Bank Street for a chat, give us a call 01968 674601 or email us on (robert@thekeyplace.co.uk; linda@thekeyplace.co.uk).

£1,300,000,000,000,000,000 in loose change can help the Penicuik Property market

For those of you with a memory for financial matters, the 5th of March 2009 will  be a date etched into your memory as that was the date by when Mervyn King, the then Bank of England Governor, had slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Nobody expected that, over six years later, rates would still be at that low level.

Last summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Penicuik, so I cannot profess to know what will happen to interest rates. However, what I do know, speaking to my Penicuik friends and Penicuik landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Penicuik landlords have been investing some of that cash into Penicuik bricks and mortar, as they search for a low risk investment opportunity.

Buying a Penicuik buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, house prices have been extraordinarily robust, increasing by over 1879% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

...and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

...but before you go out and buy any old Penicuik property, plenty of landlords still get it wrong. You have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Penicuik and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner in Bavelaw Crescent .... a lovely house in the Rullion Road area of town that was bought in April 2008 for £170,000. In the autumn, it only obtained £165,000, a drop of 3% - a very disappointing result.

Next, you have to be aware of your legal responsibilities as a landlord when it comes to tenant safety, tenants deposits, energy certificates and in the New Year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that’s why many landlords use a letting agent to manage their property for them.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Penicuik Property Blog where I have similar articles to this about the Penicuik property market and what I consider to be the best buy to let deals around at any one time in the Town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Penicuik .. you are missing out! .. www.penicuikpropertyblog.com.