Does Any Landlord Have a Rental Property in South Wales?

[Melboy]

Like most investors they have seen their savings interest collapse to near zero so they are therefore looking for other places to invest their cash and that includes me.

Buying in my location has become a lot more expensive now as M25 investors have flooded in and have bought up a lot of the cheaper end property as to them it is regarded as a very cheap deal and with only an hours drive down the M4 they obviously think it is worth it.

So it brings me onto my topic title.

I have been looking at the property in South Wales for several months now and to the outsider it does appear to be a lot cheaper and much more viable and only an hours drive for me get across the Severn Bridge and into most area's of South Wales.

Anyone care to comment?

Mel.

PS My new 21st Century boiler installation is the Dog's Doo-Dahs. Nearly finished!

[Richlist]

I have no experience of renting in South Wales but the overall impression I have is that whilst property prices in Wales are generally cheap compared to other areas :-

* It is predominantly a low income area.

* Finding good quality tenants can be difficult.

* Unemployment is high & benefits tenants are in the majority.

* Rents are low.

* There can be lots more problems than other areas.

* Investing in the lower end of the market usually means poor capital appreciation.

Buying property even an hour away will soon irritate if you have to travel there every week to sort out problems.

Buying property anywhere with a good yield only really makes sense if everything else stacks up...ie.....likely price rises (as opposed to price falls), good rents, easy letting, few problems, minimal voids etc. South Wales doesn't tick any of these boxes for me.

No doubt an irrate taff will be along shortly to shoot my comments to shreads......

[chickpea]

Yes!

Our property is very close to Llantrisant - 5 mins to M4, J34 so great for Cardiff or Swansea commute. It's on the train line into Cardiff and the area is about to get a whole new development of out-of-town shops, restaurants, entertainment facilities etc.

Because it comes under RCT council, not the more desirable Vale of Glamorgan, properties are much cheaper than 2 miles down the ad (which is where we actually live.) Currently, 2 bed semis are going for 110-120k and our agent told us yesterday that rental market is booming. We currently charge 550 for our 2 bed semi. Llanharry and Llanharan have always been cheaper again to buy because they were seen as less desirable locations, but they are coming up because of a new station and there are lots of new housing being built there.

We live near Cowbridge which is a very desirable market town with excellent schools and property prices to match - a 2 bed semi would be close to 190k.

On the other side is the area of Llantwit Major, which is cheaper has rail access to Cardiff and proximity to Cardiff airport. St Athan is largely army/RAF quarters, so cheaper again.

We haven't had a void period through lack of tenant interest since we bought the property 20 months ago, and have always had a wide choice of tenants.

[chickpea]

PS I'm not an irrate Taff, for the record.

South Wales is a HUGE area. Yes, the valleys are very much as RL describes, but the Vale of Glamorgan and many areas of Cardiff ( eg Llandaff, Roath Park, Pontcanna,Penylan, ) rival prices in Surrey (where I'm from). Cardiff has changed beyond recognition the last 20 years, with millions of pounds of investment in all areas of business.

[Melboy]

My Grandfather was Welsh so therefore I have a very Welsh surname so that should insure me somewhat from the Firestarter's (remember them? )

I am looking at the Valley's mainly because with the resurrected Valley train service now some properties are looking to be very good value with a good yield on the capital outlay.

I have been offered a tidy 1 bed F/H flat for £25,000 can you believe that. You can't buy a shed around here for that money.

I knew you were in S. Wales Tracey.

[chickpea]

Whereabouts in the valleys, Mel? Merthyr or more my way?

[Richlist]

I am looking at the Valley's

Yes, the valleys are very much as RL describes,

Seems that you might need to look again then if what I posted is actually the case.

[Melboy]

Whereabouts in the valleys, Mel? Merthyr or more my way?

Aaah! Good question. No set location but any property would have to be near a railway station and most of these Valley properties now are.

Maesteg? Neath? Llansamlet ? to name but 3 area's.

[Melboy]

Yes, the valleys are very much as RL describes,

Seems that you might need to look again then if what I posted is actually the case.

I have no doubt whatsoever that what you have said is very true RL but I am only looking at the small property investment idea.

Scumbags have no differential as to how they will mistreat a property be it a £1,000,000 property or a £50,000 one.

Went into one only 2 days ago......Unberluddy believable it was...... and I have seen a few.

[chickpea]

As you say, scumbags are scumbags and the postcode they live in makes no odds.

A lot of people are born and die in the valleys - it's a very Welsh thing to stay within spitting distance of your family and friends and never leave the place you were born. Valley folk are very proud of their roots and perhaps a lot of them don't have very high aspirations - but that doesn't mean they're all benefit cheats and scroungers. A lot of the valleys are undergoing regeneration because of the pressure for suitable housing, schools etc.

I guess if the sums add up, Mel, it's as good a bet as any.

[Richlist]

Well £25,000 might be a small sum to Mel but I wouldn't want to throw £25,000 of my money at something that merely represents 'as good a bet as any'.

I'd need considerably more persuasion that a Welsh valley property was a good investment of my time & money.

Don't forget the old saying.....a fool & his money is soon parted. Not that I'm suggesting anyone other than me is a fool......but you do have money burning a hole in your pocket and it looks like you'll soon be parting with it !

[chickpea]

You've misquoted me, RL - or at least edited to miss my point.

I said "if the sums add up, it's as good a bet as any".

Without the benefit of a crystal ball, I don't see the valleys as any more of a risk than any other area - they cover a large area and the variation within that area is huge. Because of the (still) high house prices in other parts of South Wales, lots of young professionals choose to live in the valleys because they can't afford to be closer to Cardiff. With the same precautions and vetting process as Mel would use with to find tenants for any of his other properties, I don't see the risk as any different.

I spoke to our agent yesterday about the option of selling our rental property - and his answer was that he has plenty of landlords looking to buy, with or without tenants in place, because the rental market here is so strong. Certainly, my experience of rental properties at the lower end of the market coming onto Rightmove locally is that they are let very quickly.

[Melboy]

Well £25,000 might be a small sum to Mel but I wouldn't want to throw £25,000 of my money at something that merely represents 'as good a bet as any'.

Not so much a small sum RL but what you can get by rental return on that money.

It's a pittance in my building society account I do know that.

Anyway I havn't decided which way to jump yet.

[Mortitia]

I have always thought Valleys culture strange. If you go around the cemetries in these old mining villages you will see that the original miners came from just about everywhere - from Italy to Ireland to Poland and this was in the 19th century. Religion and the pit ruled their lives - but no longer.

Having been' Valleyised' today's inhabitants seem unwilling to leave though there is little work and a massive drug problem with the under 40's. (I too have distant family in the area of Merthyr and Treorchy and just about everywhere else in S. Wales it seems - they are all wasters.)

I fear Mel that the rental market will be mainly taken up by DHS tenants which I know you are against - you might do better buying a beach hut on Bournemouth sea front.

[chickpea]

We have a joke around here that the only difference between where I live and the less desirable side of the county is that people here have more money to spend on drugs...

[Richlist]

Looking at the future thru my crystal ball............

Its my belief that drugs will be legalised within the next few years and that history will look back in astonishment that we struggled for so long to control and criminalise the industry.

Areas that have large numbers of residents with drug dependance are likely to remain the same........its not ever going to change.

[Melboy]

I fear Mel that the rental market will be mainly taken up by DHS tenants which I know you are against - you might do better buying a beach hut on Bournemouth sea front.

If only I could afford one Mortitia.

My close family friend has a beach hut on Portland Bill and it would sell tomorrow for £20,000 Crazy!

Well, it is good to read what other people are thinking about my buying in S. Wales.

My next area of thought is domestic garages.

[Richlist]

My next area of thought is domestic garages.

These can be outstanding investments especially in/near London and close to rail stations.

[chickpea]

Mel - don't write off the whole of South Wales.

Maybe the valleys aren't for you, but there's a lot more to this part of the country. (granted, costing more than the 25k you mentioned).

We live close to the Heritage coast, in beautiful countryside and our high street has a Waitrose, Fat Face, Viyella, Country Casuals and Costa alongside the very expensive independents - a world away from what's been portrayed in other posts. :-)

[Melboy]

Mel - don't write off the whole of South Wales.

No don't worry Tracey I have never rushed into things or made rash decisions well, not too many, and the padlock on my wallet is bigger than Richlist's

I miss the World of property renovation but there is absolutely nothing around here for sale and it is doubtful that anything is likely to come up.

2 years ago I was offered a block of 4 brand new private garages and I wish I had bought them now. I was never one to dwell on past errors.

[Grampa]

My next area of thought is domestic garages.

I have a few landlords who like to buy up garages. In my area they range for standard size with up and over door between 7-12k though the professional landlords will only pay the lower end. The achievable rent is about 55-65 pcm.

I try to steer clear of them as a agent as there is not much in it for me to manage but I do a few for my bigger clients.

The things to watch out for is asbestos roofs that need repairing and the cost for replacement doors. Also get a deposit and enough info (similar to a tenant) to be able to chase the "tenant" for damage to doors and crap left behind.

Never had to evict someone from a garage though I have threatened to send someone round to empty one if the rent wasnt paid. (yes I know I shouldnt have)

[Richlist]

On your figures Grampa that shows a gross yield of between 5.5% - 11.14%

That might not seem particularly earth shattering until you realise that expenses for letting a garage can be virtually zero.

I guess there are other issues such as vandalism that can be difficult to eliminate/ control.

[Grampa]

We have had a few that leak which can be tricky to resolve if the roof is asbestos. Also if close to the sea the cables or springs need to be replaced more often especially if they are not maintained and that can soon wipe out any profits. I also havent seen them increase in value much over the last few years.

I cant say i would be jumping at the chance to to buy one unless it was dirt cheap.

I do have a handfull of properties I rent where the garage is in a complex away from the property and therefore I have been able to rent separatly and get the landlord another 50-60 quid a month. You have to check the lease if part of a flat as the lease may have a provision against doing that.

[Richlist]

We have had a few that leak which can be tricky to resolve if the roof is asbestos.

Putting on my builders hat.......I'd say there are some superb mastics & sealers around for £10 a tube that will seal leaks on almost anything.....even under water.

Also if close to the sea the cables or springs need to be replaced more often especially if they are not maintained and that can soon wipe out any profits.

A simple annual application of a liberal quantity of grease will do the trick. Waiting for anything to fail is always more expenses than preventitive maintenance.

I also havent seen them increase in value much over the last few years.

Thats true about lots of different types of property in many/most areas......but when your money is struggling to achieve 3%.......the higher returns from this type of investment begin to look attractive.

I cant say i would be jumping at the chance to to buy one unless it was dirt cheap.

Me neither.

[Grampa]

We have had a few that leak which can be tricky to resolve if the roof is asbestos.

Putting on my builders hat.......I'd say there are some superb mastics & sealers around for £10 a tube that will seal leaks on almost anything.....even under water.

Quite right but try finding a builder or handyman who who will do it. I just get a sharp intake of breath and a shake of the head as soon as the word asbestos is mentioned. "Cant touch that guv"

If it was my garage i would be up there like shot doing a repair (well maybe not like a shot) and try not to do any drilling into it.

The thing is you have to be so careful nowadays . I also manage a few freehold blocks of flats and it is a legal requirement to get a asbestos report and even if has traces of it in the artex which is common (communal areas) I have to inform any contractors in writing who go round there even if they arent working in the area in question. How long before landlords have to get a report for residential lettings?