Perren Property
Peek of the Week
Just how do you find a
'Goldmine' area?
A few
days ago, one of our Landlords contacted me with a question regarding on of his
other properties out of the area and in the North East. In a nutshell the
property was being rented out to students and he was trying to plan his next
couple of years and whether to continue renting or sell. He asked if he could
achieve similar return/ yield if he sold in the North East and purchased in
Dorking.
To
achieve a great yield and fabulous capital growth can be a real challenge, if
not impossible. It requires a good amount of research. The property in
question was bought for circa £220k and has a monthly rental of £1550 which in
turn gives a good gross yield 8.4%.
My first
area of research was the latest Land Registry data, which was published on the
28th October 2015. In the table below, we can see two key pieces of information
regarding capital growth. The South East has grown by 8.5% capital growth in
the past year as opposed to the prices in the North East which decreased by
0.3% in the same period.
I then
started to look at county level- take a look its quite interesting…
Before
investing the most important thing to consider is the balance between annual
return and the annual value. However what affects those two things in Dorking
and indeed anywhere else is completely varied and complex. Whether the property
is owned/occupied, tenanted or social housing could have an affect on the yield
and capital growth. The situation above is a great example many other
investment landlords face regarding rent v capital growth. Doing such research
provides you with the correct tools to make a good decision.
If you
are looking for an investment, always check the area carefully, research and
try a gain some good, honest local advice.
