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Post by sayyestocress on Nov 16, 2016 9:48:11 GMT
Hi folks. I've only been investing with PM (also PP) for about a week so please excuse any ignorant comments on my part! From looking at the new properties available for funding and the SM it appears that PM are really rather keen on County Durham (is that a fair assessment). As an ignorant southerner who rarely ventures north of Birmingham I don't really have a feel for the area and don't have any gut instinct to call upon. PM do paint a promising picture for the area. Do you guys feel like this is a good park of the UK to invest? Do you think PM is over concentrated in this location, potentially hampering diversification within the platform?
For the properties I've looked at I get the impression that the predicted capital growth comes mainly from securing discounts from the current valuation rather than the area having large increases in value predicted over the term, which makes me question whether there will really be much appreciation in the house price when it comes to sell. The fact that supposedly large discounts are available makes me question whether they are good properties to buy in the first place. The projected rents do tend to look appealing though, assuming they find/keep good tenants.
Any thoughts would be great. Cheers.
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Steerpike
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Post by Steerpike on Nov 16, 2016 10:15:54 GMT
Here is a selection of County Durham properties that have been funded long enough to be rented, showing the original projection and the latest accounts:
SPV40 - The property is expected to be tenanted for a monthly sum of £375 - accounts October £264
SPV42 - already secured a tenant on a new Assured shorthold tenancy (AST) at £425 pcm - accounts October £275
SPV43 - expected to be tenanted for a monthly sum of £475 - accounts October £443 (including extra payment?)
SPV45 - total gross monthly income of £1,275 - accounts October £712
SPV47 - projected net yield of over 6.5% per annum - hope to have a tenant soon (advertised since July)
SPV53 - agreement to secure their place in the house for the foreseeable future at £458 p.c.m - accounts October £295
So it appears that there is demand.
The rent shown in the accounts tends to be about 60% of that charged to the tenant because of PM fees, tax, and other charges.
The deal loan amount includes the price paid for the property and acquisition costs of up to 30% including PM fees, PM financing fees, renovation, and legal.
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pom
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Post by pom on Nov 16, 2016 10:32:01 GMT
There were some earlier Co Durham ones too - am particularly fond of SPV23 that has probably been my best performer so far (and earned me some tasty gains when I listed excess shares)
I did ask a while back why so many there recently and the answer was that basically it's where they're currently able to get the best deals. The order they've all been released in recently would rather suggest they were in fact originally sourced in a very narrow time scale (same auction perhaps?) and that other factors in acquiring them messed up the release order. I'm sure we'll see something else before too long tho - wasn't that long ago that everything seemed to be in Nottingham.
As for discounts, projected values etc - well it all eventually depends on how much someone is prepared to pay on the day - who knows what might happen with the housing market? My philosophy has been to look for the rental income and treat any future capital gains as a welcome bonus without counting on them too much.
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Post by sayyestocress on Nov 21, 2016 8:34:53 GMT
Thanks folks. Continuing the theme of County Durham and strange release numbers; SPV63 is now on the site.
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ben
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Post by ben on Nov 21, 2016 8:54:21 GMT
In theroy with a lot being closer together it be easier for PM to manage them, aslo with things like legal fees, sales fees in theory if use the same company should make it cheaper.
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Post by sayyestocress on Nov 22, 2016 9:31:10 GMT
In theroy with a lot being closer together it be easier for PM to manage them, aslo with things like legal fees, sales fees in theory if use the same company should make it cheaper. That does makes sense, though personally I prefer to have a small amount of eggs in lots of baskets, so I'd choose a wider geographical spread at the cost of slightly less return. My thinking is that the sturdiest looking baskets aren't immune to breaking forever. Anywho, there doesn't seem to be any negativity towards County Durham thus far and I have invested in the new listings as they've cropped up since I joined. It's been pretty slim pickings on the SM for other locations but I managed to pick a few up that look ok; I've taken a punt on some non-tenanted ones where the shares were less than £10 hoping that they get tenants, and some where the yield will hopefully make up for the small premium over the original share price.
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