This week I spotted 2 properties on Cemetery Road in Houghton Regis which sold in the same month for the same price, but are very different in what they offer.
The average house price in Cemetery Road is £142,050 which is in line with the average house price in the LU5 postcode which is £141,043.
The most expensive transaction recorded in Cemetery Road was in November 2012 for £270,000. The most recent house purchase in Cemetery Road was in May 2013 for £125,000.
The first property is a 3 bed End of Terrace property built in 1934 which was sold in May 2013 for £125,000. Its previous history shows that in December 2004 it sold for £128,000. A 3 bedroom terraced property in this area can expect to rent for £675pcm giving a base rental yield of 6.5%
In the same month a 2 bed terraced property on the same road sold for £124,995. Its previous history shows that it last sold in 2001 for £78,500. Both the properties would appear to be in good condition so why should a 2 bed terraced property command the same price as a 3 bed property ?
Well the 2 bed was built in 1985 and therefore is more atheistically pleasing to the eye externally. A guide price for the rental value of the 2 bed property is £700pcm giving a base rental yield of 6.75% so which is the best buy for a Buy-to-Let Landlord?
One of our previous articles compared 2 and 3 bed semi-detached properties. This article can be read here ‘Which semi-detached house should I buy in Dunstable’, but one thing is clear – a 2 or 3 bedroom terraced property will give a Landlord a better yield than a 2 or 3 bed semi.
There are arguments for both properties. There are plenty of young couples looking for a 2 bed property with the spare 2nd room used for guests, a young child or an office/study whilst the older 3 bed property will appeal to the growing family who need the extra space and the larger garden that older properties can provide.
The 3 bedroom terraced such as the one on Cemetery Road is likely to rent to an established family over a long term whilst the 2 bedroom property could soon become too small for the tenants.
If you are thinking of purchasing an investment property and would like to discuss points such as these to help in your decision, please call or visit our shop where we are only too happy to help.
