Do more modern properties make better BTL investments than older properties? This comparison of 3 bed semis in Havelock Park & Ford Estate, Sunderland makes interesting reading!
I was speaking to one of our landlords last week and we got onto the subject of whether modern or older style properties made the best Buy to Let investments
This conversation got me thinking and as we've consistently advised landlords to look for 3 bed properties if possible as they are always going to be popular (there being a relative shortage of such properties in Sunderland vs tenant demand) it led me to compare modern 3 bed semi detached houses in the popular Havelock Park development with older ex-council properties in Ford Estate - I thought it would be a good comparrison given the two areas are less than a mile apart!
The results made interesting reading - the average rent for a 3 bed semi on Halesworth Drive, Havelock Park is £575pcm (and we know that such properties will be popular as we manage several on this estate) and with an average sale price of £118,300 this would return a gross yield of 5.8%, we've certainly seen a lot worse for relatively modern properties
The average rent for a 3 bed ex council semi on Falkand Road, Ford Estate is £525pcm, which based on an average sale price of £90,000 delivers a far healthier Gross Yield of 7.0%
Yield is only one factor to consider when evaluating potential BTL purchases - you should also consider the potential for capital growth and also the likely level of tenant interest (and the types of tenant who would be interested)
It's worth noting that in our experience a well presented, sensibly priced 3 bed semi in either location will be popular with good, working tenants and that Rightmove data shows prices in Ford Estate are up 30% on last year and 17% on the peak in 2007/8
We would always advise you to seek expert advice before buying an investment property