Friday, 20 November 2015

Perren Property Peek of the Week

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…  Surrey has grown by 8.3% where as for example Durham has decreased by 1.9% .

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.

No comments:

Post a Comment