Fri 30 Jun 2017 View all news articles
Have you ever considered investing in a buy-to-let property?
You may have a good idea what type of property you want to acquire, but perhaps are pondering over where is most attractive area to invest?
In figures taken across the Wirral over the last 18 months we’ve been able to analyse the strongest areas across the Peninsula for rental incomes. This uses a combination of average sales and rental prices this year to calculate the percentage yield you may expect to receive in various Wirral postcodes.
Unsurprisingly CH44 (Wallasey, Seacombe and Poulton) and CH41 (Birkenhead) with relatively low average sale prices represent the strongest yields, in and around 6-7%. So naturally these are great areas to capitalise upon!
Though be sure to factor in the possible additional costs and concerns with buying at the low end of the market. Bear in mind that your property may well need further investment to bring up to a rental standard, combined with lower end properties often requiring further works over the first few years. Typically, we find many of these properties need a combination of new carpets and redecoration throughout. In some cases, refurbishment of the kitchen and/or bathrooms may be required to enhance the standard of living. After all, better properties attract better tenants!
Moreover, these locations will feature a higher than average number of tenants subsidising their rent through benefits, along with potential licencing fees which are exclusive to certain CH41-44 postal codes.
Turning attention to CH46 (Moreton and Leasowe) and CH49 (Upton, Greasby and Woodchurch) figures indicate that due to the investment costs, yields are naturally lower around
4.5 – 5.5%. On the face of it, this may seem like a less attractive buy-to-let opportunity. However, there are some great 3 bedroom houses in these locations representing excellent value for money and currently commanding unprecedented rental prices.
These properties may also offer a stronger chance of long term capital gains and tend to enjoy longer staying tenants. With the average tenancy length now reported at just 18 months, longevity is becoming an increasing concern for landlords. Understandably, landlords want to avoid the void periods and costs associated with preparing the property for re-let and of course any repeated agent fees.
So when deciding to invest, don’t just think ‘yield’, think ‘where?’.
Questions to ask yourself before investing in a buy-to-let property:
- Is the property clean and presentable?
- Are the carpets in good order?
- Do the walls need a fresh coat of paint?
- Are the kitchen and bathroom(s) appealing?
- Would you live there yourself?
As leading Wirral estate agents and lettings agents we have plenty to talk about and like to give our opinions on a few things too! Read about what we have to say, our latest news and industry news.