When looking at a buy-to-let investment consider whether your goal is high yield or high capital growth.
A landlord came into our office last week looking at a buy to let investment. As a Winchmore Hill resident he was interested in buying another property in that area but he was also considering buying in Enfield.
I asked him what he was looking for in terms of a return on his investment. Was he more interested in a large monthly return (yield) or large capital growth over several years? Like most of us he wanted both, but on balance his main priority was yield.
Based on this requirement I advised this landlord to look more closely at Enfield.
The average price of a property in Winchmore Hill is £400,730 and in Enfield it is £261,489, that’s a difference of over £139,000! The average rent in Winchmore Hill is also higher at £1,466, whereas in Enfield it is £1,303. These figures give a yield in Winchmore Hill of 4.4%, compared to 6% in Enfield. On top of this extra yield the Landlord would also save himself more than £139,000! So for this Landlord, Enfield is quite an attractive proposition!