A long standing landlord of ours and I had a discussion about the property market in Guildford, w...
A long standing landlord of ours and I had a discussion about the property market in Guildford, when the subject of risk against returns arose.
All investors are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of easily finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan. Everyone wants their cake and eat it, chasing high yields and exceptional capital growth above the market average with a superb tenant, but it is wiser to prioritise one of these in line with your long term objectives.
For a low risk investment, you could buy property in the areas of Guildford which are perceived as being more desirable, such as along Epsom Rd or in the town centre , where you may be able to achieve an annual yield of around 4.5-5.5% with quality professional or corporate tenants.
If you don’t mind a more varied quality of tenant, such as students or professional sharers, you are likely to be rewarded with a higher annual yield of 6-7%. This level of risk can be typically taken with properties in North Guildford.
If you are after annual yields of 8%, you could take more of a risk with houses of multiple occupancy or letting on a room by room basis with properties in Bellfields or Park Barn which may attract tenants of a more transitional nature and create more work.
If you would like any advice on choosing properties, come and see us at our office on Woodbridge Rd or email email@example.com