“Business as usual for Buy-To-Let
Landlords in North Kent”
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With the economy
growing at an impressive pace, there are murmurings of interest rate rises
happening sooner rather than later.
The property bubble
is a South East issue though and many experts are predicting a downturn
throughout the rest of the country if this were to happen.
Can George Osborn
or Mark Carney risk this?
Many of my
landlords are continuing to purchase in the knowledge that nothing is “as safe
as houses” for an investment.
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Where is the best place to buy a
rental property?
Over
the last couple of months, several first time landlords have contacted me for
my thoughts and opinions on what (and what not) to buy for their first time Buy
to Let (BTL) investment. As I don’t sell property I can give an objective
opinion on the whole of the Dartford and Northfleet property markets. Some want
high yields, some want no hassle, some good capital growth, some are unsure of
what they want.
Then,
last week one of my current landlords asked basically the same question! The
landlord in question has a small portfolio of flats and houses in the Dartford
and Northfleet areas already and wanted to add to his portfolio.
We
looked at the Dartford (DA1) postcode for 2 Bed Terraced properties, and saw
that the average cost was £178,100 with an average rent of £975 PCM, whilst
Northfleet had an average cost of £159,400 with an average rent of £825 PCM.
The
annual yield in Dartford could be an impressive 6.5% whilst in Northfleet an
annual yield of 6.2% is equally impressive.
However,
the yield is just one factor that needs to be considered. One must also think
of the increase in the value of the property.
Interestingly,
property in Dartford (DA1) has increased in value by 7.95% in the last 12
months (£18,542), by 13.30% over the past 3 years (£29,568) and by 19.04% in
the past 5 years (£40,279).
Northfleet
(DA11) has seen property values also increase by 8.73% in the past 12 months (£16,534),
by 14.14% over the past 3 years (£25,515) and 17.82% in the past 5 years (£31,153).
Therefore,
I would say both towns could be an ideal place for an investment property, but
it is decision that should not be taken lightly. These are only averages, so
the yields for 2 bedroom terraced properties could be higher or lower dependant
on area and therefore the property price paid.
Whatever
you decide, the returns as indicated are somewhat better than the Building
Society!
If
you are wondering how you work out the “yield” it is really quite simple.
Rent PCM x 12 [year] ÷ house cost
EG: 975 x 12 ÷ 178,100 = Yield 6.5%
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I
don’t charge for my advice because I offer you the best opinion and we start to
build a relationship, then you might (no obligation) use Virotti to manage
those properties. If this happens I will have plenty of time to earn money and
more importantly build a good working relationship with you by looking after
your BTL property for years to come, a property that we jointly decided met
your requirements for the investment...... because that is what it is.... an
investment.
So,
feel free to call for a chat about the property market in our town.
