As many of our clients and followers will know, we are developing a block of 28 large self contained studio units in the centre of Stoke-on-Trent. A number of our clients have asked why we decided to develop in this city. London or cities such as Birmingham and Manchester would appear to have been a more obvious choice. The answer is that we wanted to offer our clients a sound property investment at an affordable price and as you can see from below, we firmly believe we can do this our our Stoke-on-Trent development.
The common mantra of estate agents that ‘Location, location, location’ is the most important factor in property investment is too simplistic. The key is to buy:
i) the right property
ii) in the right location
iii for the right price
iv) at the right time
v) through the right adviser/developer.
We call it ‘The five rights’ of successful property investment and you will hear us talking a lot about this during 2015. If investors follow this strategy then they will have invested wisely.
So let’s consider London first. This is a truly international property market and will produce sound returns going forward. There will always be occasional blips, but international demand will keep pushing the market forward for the foreseeable future. The problem for many investors is the cost of entering that market. A decent one bedroom apartment in a central location will start from £200,000 and even with a mortgage this is beyond the reach of many people. It might be the right location, but if you can’t afford to buy the right property there then all of “The five rights’ have not been adhered to. There is little point in buying the wrong property simple because it is the right location.
It is fair to say that many investors feel more comfortable with a bigger city. They imagine there will be stronger buyer and rental demand going forward simply because there are more people living there. Unfortunately, this is not necessarily the case and much depends on the specific property and the location it is in. The essential formula of limited supply and strong demand can apply irrespective of the size of the market.
Take Stoke-on-Trent for example. It isn’t the biggest city in the UK and it certainly hasn’t got the best scenery or football team. It is like a lot of other cities; it has a decent size population and the usual city infra-structure. So why invest there as opposed to anywhere else? The honest answer is that there is no reason whatsoever to choose it over anywhere else. Which is not say you should not invest there. On the contrary, the important thing is that if you can find the right opportunity there then it is as good as anywhere else. It is all down to ‘The five rights’ and if you can find a property there that is suitable then you can buy it with confidence.
So let’s take a look our Majestic Court development in Stoke-on-Trent and see whether it meets ‘The five rights’ criteria.
i) The units are large self contained studios that will be modern and very popular with young professionals, students etc. For that market, they are the right property.
ii) They are superbly located adjacent to shops, restaurants and within easy walking of the railway station and the Staffordshire university campus , so they are in the right location.
iii) They are the right price for many our clients (under £60,000 and with a guaranteed tenant) and represent excellent value on a pounds per square foot basis.
iv) The general UK market will always have blips, as will London, but the time to invest for the future is now, not in the future.
v) Lastly, we have been operating since 1992 and firmly believe we are the right adviser to use (of course, you would expect us to say that but we actually believe that and so do our clients). Importantly, we are the developer and will provide a quality product that will meet our clients’ expectations.
When we found the opportunity in Stoke-on-Trent and carried out our due diligence we quickly realised it was a sound place for us to develop a quality product that our clients could benefit from. We are extremely confident that time will prove us right. Going forward, we will find opportunities in other areas and if they satisfy ‘The five rights’ then they will be worthy of consideration.