Folkestone Buy To Let Property of The Week

£550pcm - £125,000 - Broadmead Road

Update:  We've moved our blog to www.folkestone-estateagent.co.uk




I've chosen this lovely little one bedroom flat on Broadmead Road this week because it's the sort of property which ticks all the boxes for a potential tenant.  

It's ground floor with a lovely little garden, double glazing, gas central heating, good sized rooms and a bit of storage.  Literally around the corner from Folkestone Central Station (0.2 miles according to Rightmove) which takes you to London on the fast train in 54 minutes.

Assuming the property is kept in good condition, all those lovely ticked boxes will help by keeping the rent up, reducing voids, lengthening tenancies and attracting quality tenants.  (found for you by us, of course!)

All this with a potential yield of 5.5%.

Oh, and it's share of freehold...  take a look on Rightmove...


P.S. See update below in comments>>

6.57% Yield Folkestone Buy To Let Property of The Week

Radnor Park Avenue £105,000 and potential of £575pcm

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


What's That? Yield Under 7%?!???!


Before you start throwing rotten veg, take a closer look....



The location and size of this property is amazing, the lease is long, there's off-road parking, double-glazing and just around the corner is Radnor Park and Folkestone Central Station which will get you to London St Pancras in under an hour.



OK, the yield isn't as high as other deals I've written about recently, however the potential for capital gain is there too and that's something that should be factored in here.



Based on the advert I think that the agent's photos seem to be avoiding the radiators which are likely to be storage heaters and there's no photos of the bathroom so either one of the vendors was in there taking a really long bath when they came round to take photos or we should expect an avocado suite or DIY tiling.  <eek>



Take a look at this property on Rightmove and see what you think... http://www.rightmove.co.uk/property-for-sale/property-32448309.html

£185,000 inheritance - Is buying Folkestone Property still the best place for my windfall?

Two Bedroom Ground Floor Flat in Julian Road

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


I had an interesting email from someone in Folkestone a few weeks ago that I want to share with you (don’t worry I asked his permission to share this with you all). In a nutshell, the gentleman lives in London, he is in his mid 60’s and still working. He has a decent pension, so that when he does retire in a couple of years’ time, it will give him a comfortable life. He had recently inherited £185,000 from an elderly aunt. One option he told me was put it into a savings account. The best he could find was a 2 year bond with the Post Office which paid 1.9%; meaning he would get £3,515 in interest a year. One of his other options was to buy a property in Folkestone to rent out and he wanted to know my thoughts on what he should buy, but he had concerns as he didn’t want to take a mortgage out at his time of life. He was also worried about all the tax changes he had read about in the papers for landlords.

Notwithstanding the war on Folkestone landlords being waged by George Osborne, the attraction of bricks and mortar endures for many. As our man is a cash buyer, he would not have to deal with the intricate cut to mortgage interest tax relief that will diminish, or even eradicate, the profits of many Folkestone landlords. It’s true he would face the extra 3% in stamp duty to buy a second property, but with some good negotiation techniques, that could soon be mitigated.

I told him that buying a Folkestone buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £3,515 a year or, as he rightly suggested, invest in property in Folkestone. The average yield (yield being the equivalent of the interest rate on the property) at the moment in Folkestone is 3.74% per annum, meaning our potential F.T.L (First Time Landlord) should be able to, depending on what he bought in the town, earn before costs £6,919 a year. (However, I told him there are plenty of landlords in Folkestone earning half as much again (if not more), if he was willing to consider more specialist investment types of properties – again, if you want to know where – look at my blog or drop me an email).

The bottom line is that the success of investing in Folkestone buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike with a savings account, with property the capital you invested can also go up (and yes, it can go down as well – more of that in second). Property values in Folkestone have risen in the last twelve months by 8.4% meaning, that if our chap had bought a year ago, not only would he have received the £6,919 in rent, but also seen an uplift of £15,540 …meaning his overall return for the year would have been £22,459 (not bad when compared to the Post Office!).

..  but the doom mongers amongst you will say, property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices had bounced back to their ’79 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped in 1988 and did take 13 years to reach back to those ’88 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Land Registry, average property values in Kent currently stand 10.42% below the January 2008 level, and anecdotal evidence suggests that in the nicer parts of Folkestone, we are well above these sorts of levels. Therefore, all this talk of property crashes is unfounded.

… and what would that £185,000 get you in Folkestone? A superb 2 bed apartment in West End, a lovely 2 bed terrace in Cheriton or a stunning 2 bed apartment with sea views in Sandgate .. in fact, the world is your oyster. But which Oyster? Well, my blog-reading friends, if you want to read similar articles like this and what I consider to be the very best of buy to let deals in Folkestone, irrespective of which agent is selling it, scroll back to the top and subscribe by email!

4,048 Folkestone Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


There I was, out with the family at Lower Leas Coastal Park last weekend, when a smart gentleman approached me. ‘Hello’, he said, ‘You are the person writes that Property Blog aren’t you? We have met before at that Business Networking event in Folkestone a few months ago’. I did then recognise him and, whilst I wont mention his name, he runs a small but perfectly formed well known independent retailers in the town ... It’s amazing who you see when out walking! Anyway, I was at a loose end for five or ten minutes as the other half was encouraging offspring number one down the slide, so we had a chat.

He wanted to know my thoughts on the future of the Folkestone property market, and I would now like to share with you that conversation, my Folkestone property Blog reading friends. People are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the town have a choice to what type of roof they have ... they rent from the Council, they can rent from a private landlord or finally they can get a mortgage and buy one. In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently fewer Folkestone youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering ... and I want to share them with you.

Roll the clock back 20 years and Folkestone was a different place. There were 22,020 households in Folkestone and 13,022 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 4.23% to 22,952 and quite surprising (to me at least), the number of owner-occupiers has decreased to 12,195 (although as a proportion, it is only 53.1% compared to 59.1% twenty years ago).

However, it’s rented sector that is truly fascinating … twenty years ago, only 3,308 properties were privately rented in Folkestone ... and now its 7,356, a rise of 4,048.

The twentysomethings of Folkestone housing difficulties haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 2,218 to 1,739 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect supply. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Folkestone and those who educate themselves and treat it as a business will survive and prosper.

The best way Folkestone landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, Folkestone tenants have ever-growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Folkestone (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

... And just as the other half had sorted the family, he asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand it is hard to imagine Folkestone property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the the housing market should return to balance.

If you're researching a potential buy to let investment in Folkestone then give us a call for a guide to the best areas to consider for your portfolio on 01303 212797.

One Bedroom Apartments in Folkestone – Are They A Good Investment?

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


A potential new landlord popped into our office last month looking for advice about purchasing her first buy to let investment in Folkestone.  She’d seen the recent publicity in the newspapers about Folkestone being an up-and-coming seaside town and the rise of our arts scene fueled by the recent investments made by The Creative Foundation and our new fast train to London.  She was particularly interested in finding a property which had at least a 6% yield but also had the potential for capital gain in the future.  This particular landlord has just exchanged on a property that we found for her, but since then we’ve been instructed on another similar property just like it.

We currently have a one bedroom flat with a private garden on Julian Road

One Bedroom Flat with Garden
Currently Let at £575pcm - £110,000

available for a very reasonable price of £110,000.  The property is being offered as a Buy To Let investment. There is a fully referenced tenant who has just moved in on a 6 month Assured Shorthold Tenancy.  The rental income for this tenancy will be £575 pcm giving a 6.27% yield.  However, you must remember that every landlord’s tax position and interest rates are different, so it is essential to research your investment carefully before committing.

On a personal note, we're really hoping to find an investment landlord for this property since the tenant who has just moved in has had to move three times in the last 18 months due to his landlords selling their properties. Julie, our Sales & Lettings Co-ordinator, says that he's a lovely man who's hoping he won't have to move any time soon!

Finally, let’s not forget about the potential for increase in capital value of the property. I was looking at the history of sales prices for flats and apartments on Julian Road and found that they have increased in value by 15% in the last five years.  With more commuters moving to Folkestone every year, whilst capital gain is never a dead cert, it certainly is building momentum in Folkestone.

If you're interested in Investing in Folkestone, download our Market Analysis of the local market from our not so secret website which includes supply and demand statistics broken down by number of bedrooms and a map showing the fast train railway stations and the most (and least) popular areas.

Are High Yield Properties Too Good To Be True?

Update:  We've moved our blog to www.folkestone-estateagent.co.uk


I'm going to be a bit controversial here, remove my letting agent hat and talk to you as a landlord and a property investor.

I often speak to new and existing landlords who have called the office to ask about a particular property that they've seen for sale online.  I'm always delighted to have these conversations firstly because I'm human and I enjoy sharing my experience and expertise, but also because nine out of ten new landlords aren't yet switched onto this inconvenient truth:

95% of High Yield Properties Don't Deliver on Capital Gain

And that's why I'm so happy to talk to landlords about their potential purchases before they buy them.  For those of you who aren't already nodding your head in agreement, let me explain.


High Yield Properties Tend To Exist on the More Affordable Side Of Town.

Yes, there are exceptions to this rule, but in the majority of cases this is a universal truth.  Taking Folkestone as an example, three bedroom properties are in high demand and low supply in the whole of the rental market, making them an ideal investment opportunity at the right price.  Let's compare two properties, one in the affordable side of town and the other near the fast train to London.

Invicta Road, Folkestone	Limes Road Folkestone
Price: £140,000 (Update: Sold for £138,000*)	Price: £385,000
Expected Rental PCM: £700	Expected Rental PCM: £995-£1100
Estimate Gross Yield: 6% (*6.09%)	Estimate Gross Yield: 3-3.5%

So Invicta Road massively outperforms Limes Road in terms of gross yield, and in fact you could buy two three bedroom houses on Invicta Road for the price of Limes Road and make potentially twice the yield.  Wow!  If you're simply looking for a short term investment which outperforms the bank then Invicta Road is worth a look.

What About Capital Gain Then?

Let's look at two similar properties, of the same size, on the same streets and see how much they've sold for in the last ten years…I know which option I prefer for capital gain.

So there we have it - High Yield and Capital Gain are in most cases mutually exclusive when you go to the extremes.  There is, however a sweet spot in between and other ways to get your capital gain… but that's a story for another day.

If you'd like more information about the Folkestone Rental Market then download our report or give us a call on 01303 212797.

BTL Property of The Week

Three Bedroom End of Terrace in Invicta Road, Folkestone

Important: We've moved our blog to www.folkestone-estateagent.co.uk


6.18% Yield on Invicta Road, Folkestone

Update: This property was sold for £138,000 (6.09% Yield)

Whilst rummaging around looking for my 6%+ deals I noticed this little interesting property just off Canterbury Road.

It's an end-of-terrace 3 bedroom property with two reception rooms which is in very good decorative condition and on the market for £140,000.

Based on a purchase price of £136,000 and a very conservative rent of £700 pcm  you'll be looking at a very respectable 6.18% gross yield. (£725 is achievable, but the former will keep voids down and your return on investment up)

This property was last on the market in 2009 and sold for approx £130,000.  Whilst it is only 0.8 miles from Folkestone's fast train to London (58 minutes), it's unlikely to attract commuters because of the steep hill between the station and Invicta Road, however the area is popular with blue and white collar workers with families who work full or part time.

Ideas to push down voids and increase demand:  

The property lacks carpets in the downstairs areas and is ideal for pet owners in that regard.  Accepting a cat or a small dog could push your yield up to 6.4% (£725 pcm) and enable you to take a 6 week deposit to mitigate any additional risk. 

Although the house is in a very good decorative state, I'd say that the bathroom is the weak spot of the property as a Buy to Let Investment.  The double sink unit is quite an extravagance, however the shower over bath is frankly a bit disappointing. An ideal rental would include both a good bath and an attractive shower.  Good tenants aren't keen on the mixer tap shower and will avoid it where possible.

In addition to this the tongue and groove cladding could encourage leaks and the tiling above looks like it has been there for a while.  If it were my Buy to Let Investment then I would remove the cladding, invest in some new tiling and install an electric shower and glass screen.

Finally I would replace the carpets in the bedroom for something a little more attractive and a little less grey.

If you'd like more information about the Folkestone Market then visit our not so secret website: Folkestone Rental Market Report.

Property Investing in Folkestone - Location, Supply & Demand

As an experienced agent who's been around for a few years, I've become quite used to giving investment landlords my virtual tour of Folkestone when they pop into the office for the first time.

Usually they've come in to talk about one of our sales properties and the conversation switches to whether we think it would stack up financially as an investment property.  This is the point where I reach for my giant laminated map of Folkestone and the virtual tour begins….

Like any town, Folkestone has its good areas, not so good areas and lots more in-between.  Folkestone West is perhaps the most desirable part of Folkestone and the harbour area has the most potential.  The Morehall district of Cheriton benefits from a combination of: