Thursday, 12 April 2018
BUY WELL IN MILTON KEYNES, DON’T CHASE THE YIELD FOR ITS OWN SAKE
It is said that you make all of your profit when you buy a property, not when you sell it, as you are in more control of what you pay rather than what you are forced to sell for. With this in mind, why pay high end retail price for a property just because it looks sweet & idyllic, when what you need is a property that first & foremost meets all the financial requirements of an investment landlord?
It is very easy, especially for the novice property investor, to fall in love with a property and let their heart rule their head, and become so emotionally involved that they lose control of their finances and let their emotions win, by committing to a property that THEY might like to live in themselves. The most important message to convey in all of this is that buy-to-let property investors MUST buy well in the first place, because if you start the investment process in the wrong place, the rest of the mathematics that need to be in place to validate this transaction just do not stack up. If a property price is too high, and you just cannot get anywhere negotiating money off the price, then there is one thing to do and that is WALK AWAY – like buses, there will always be another one along soon.
The novice investor often thinks that by paying more for a property they will get a better property (not necessarily true, again, just buy well) instead of considering house prices & rental values around the local area and working out what drives them. They cannot reasonably expect the market, which is an average of many transactions and house prices, to change its tune in order to meet them at their now inappropriate level of expected return (yield) that they expect, simply because they paid too much in the first place – market forces don’t work like that. If a property investor is not sure on the potential rental levels for a given location, just get them to speak to me for free, impartial advice. I can let them know not only how much rent to expect, but from that I can advise them how to work out what the maximum is that they should be paying, and how much rental demand there is for a particular property – there is absolutely no point in buying something, or somewhere, where very little demand exists.
As for buyer beware, well they certainly should beware it with a capital B. Check out the larger, more important facilities in the house such as the boiler, electrics and plumbing, especially when paying in cash, because many investors won’t do this, and if they end up buying a problem then they will own that problem.
If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Milton Keynes Property Market together with regular postings on what I consider the best buy to let deals in Milton Keynes, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at firstname.lastname@example.org
If you are in the area feel free to pop into the office we are based at 181 Queensway, Bletchley, Milton Keynes, MK2 2DZ -the kettle is always on.
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