You can buy a
smallish one bedroom flat in PL4, for a very reasonable £70,000 in some areas.
If a landlord put down a £17,500 deposit and borrowed the rest, they could
achieve around £400 per month in rent. Without taking into account service
charges and ground rent, a gross yield could reach around 6.8% per year.
However, you must remember that every landlord’s tax and interest rates are
different, so it is essential to research your investment carefully before
committing.
Finally, let’s not forget about the potential increase in capital value of the property. I was looking at flats in the modern Freedom Field development in Emily Gardens, Greenbank and found the following. A property original sold for £87,000 when the development was original built in 2001, this year it sold for £125,000. The property had sold in 2005 for £146,500, an increase of 68.4% in 4 years. At the peak of the market in 2007 some flats sold for £160,000, we could see similar growth in the future to this level.
The one word of caution I always use especially for one bedroom flats is “Churn”. The tenants in one bedroom flats being it a couple or a young professional never seem to settle for a very long period. The couple have a baby and need a bigger property or the professional person gets a new job and moves out of the area. Over a period of time I would always expect a landlord to have more tenants for a one bedroom flat than a 2 or 3 bedroom house. This is often great for us letting agents but not so great for Mr and Mrs Landlord – voids and lettings agents fees. Just one more point to consider before investing your hard earned cash.
If you would like some advice about what could make a good investment, please visit our offices me in our new modern office in Stoke Village, or give me a call on 01752 710747.
0 comments:
Post a Comment