I was talking to a couple last week, who are considering becoming landlords for the first time.
I was talking to a couple last week, who are considering becoming landlords for the first time and they were looking for advice as to whether a property on Tokar Street or Froddington Road would make a better Buy to Let investment. They were interested in which would offer a better return/yield, and whilst properties on both streets can let and sell well, I wanted to do a bit more research to help them with their decision.
Over the last three years, the average value of a property on Froddington Road has been around £128,666; while on Tokar Street it was nearly 13% more, at around £144,610. To better understand the investment opportunities available, we considered the rents of the same three year period. The average rent achieved on Tokar Street was in the region of £725pcm, giving an average yield/return of approx 6%. On Froddington Road the average rent was slightly lower, at around £720pcm, with a corresponding yield /return of 6.8%.
However, one must also consider capital growth and how the value could change over time. In 1995, a terraced house on Tokar Street would have cost approximately £84,526 and on Froddington Road the average value was £78,025. This shows that the average property value on Froddington Road Road has risen by 64% since 1995, and on Tokar Street has risen by 71%.
Ultimately, we found both streets to be equally good investments, but as you can see there is hardly any difference in the yields/returns or the increase in values, which we would not have identified without that extra investigation. In this case, it depends on the best available property to buy on the day.
If you are a landlord, new or old, feel free to visit Samantha Bateman (Office Manager) in our office on Palmerston Road to ask her opinion on which property investment is best for you.