A property investor from London called me last week looking for objective advice as he had been offered a 'Below Market Value' 2 bedroom apartment in a modern development in Ashbrooke (SR2).
A property investor from London called me last week looking for objective advice as he had been offered a ‘Below Market Value’ 2 bedroom apartment in a modern development in Ashbrooke (SR2).
Even before he told me the name of the development, I could work out where he meant and quickly steered him away from this, pointing him in the direction of the sort of properties in Sunderland that may not be as ‘sexy’ as the one he’d been offered but will inevitably stack up as a much better investments.
We rarely advise investors to purchase flats or apartments in or around the City Centre (SR1 or SR2) due to oversupply forcing rents down and also the constant churn of young tenants which will eat into their returns.
That said, flats should not be discounted out of hand, as they often require less maintenance and upkeep than houses and may be available more affordably – but we advise canny investors to look further afield to the outlying areas of Sunderland to pick up a bargain and for a steadier stream of long term, working tenants.
North of the river in SR5 there are developments of 2 bedroom flats (usually in blocks of 12 built in the 1960’s) in the Town End Farm area that are always popular with tenants due to the proximity to Sunderland’s major employer Nissan – in fact there is a 2 bedroom 2nd floor flat in the Agents Property Auction at the end of January (click http://www.belvoir.co.uk/for-sale-at-auction-2-bedroom-top-floor-flat-guide-price-29950-p4862 for details) that will easily achieve £395pcm & therefore return 7.0% gross yield if the total cost of investment was £68,000. Given 2 similar flats in an identical block sold last year for around £48,000,this looks very realistic and achievable.
At the other side of the City in Moorside (SR3) we always find it easy to rent the 2 bedroom flats that were built in the 1970’s to good working tenants. These versatile flats (many of which come with separate garages) appeal to a wide range of tenants due to their handy location close to the A19 and the Doxford International Business Park. Rents for good quality examples range from £450 – 495pcm making it possible to achieve over 7.0% Gross Yield, given the average sale price is currently between £70,000 - £80,000.