I was chatting with a Landlord earlier this week who was looking to purchase a Buy to Let propert...
I was chatting with a Landlord earlier this week who was looking to purchase a Buy to Let property in the South of Bracknell. He asked me which i thought was the best place to invest, Hanworth or Crown Wood?
The advice i give to Landlords is to do the sums and see which fits their strategy the best.
The Landlord and i did some comparison research between Hanworth and Crown Wood and then further research for a typical 2 bed apartment.
The average price for a property in Hanworth is £253,000 which is up 17% on a year ago. In Crown Wood the average price is slightly less at £245,000 with an annual increase of 8%. These simple figures may lead some investors to go for Hanworth as it has the better capital growth but we should not forget that these figures are historical and Crown Wood may be playing catch up now.
We looked closer at some numbers for 2 bed apartments. The average prices in Hanworth and Crown Wood are £167,000 and £154,000 respectively with typical rents of £975 for Hanworth and £925 for Crown Wood. Another win for Hanworth? Not necessarily.
When we looked at the yield for these figures, we found that Hanworth gave a gross yield of 7% against a 7.2% yield for Crown Wood. So you get a better return on your investment from buying in Crown Wood. If you factor in the cheaper purchase price and you put in the same amount of cash deposit to either area then you may get a lower loan to value for your mortgage which will offer a better interest rate. This will have a beneficial effect on your net yield.
So where do you think i told him to invest? There is no right and wrong answer. As investors we don't buy average houses, every house is different and should be judged on it's own merits in relation to each investors strategy.
If you would like some impartial and practical analysis of your possible purchases or would like a review of your current portfolio to see if it is working the way you want it to then why not come along to our office for a chat. We don't sell houses but we do offer specialist advice for Buy to Let investments.