Over the course of the years we have been in business (nearly 10 years), we have acquired a few clients who are best described as professional landlords. I call them professional landlords only because they approach the market differently to the majority who have one or two properties. These property magnates are constantly evolving their portfolio, always looking at areas of improving their annual yields and capital gains. Where is the next up and coming area to invest in? How can I get in on the action and get myself a slice of that cake?
Whilst I don’t claim to be a financial expert in other areas such as stocks and shares, bonds and ISAs, I can offer some guided and informed advice based on years spent in the field of residential property investment and personal experience managing my own portfolio.
Recently, I was speaking to a landlord who was looking to invest in another property to add to his portfolio. We currently manage four properties for him, which he has acquired over the years through our combined partnership. Two areas we compared were the Kings Point development on the edge of Bescot (near the Bescot Stadium) and the nearby Tamebridge development.
He was looking to purchase a three-bed house. The one at Kings Point was priced at £155,000 and the one at Tamebridge was £195,000. The million dollar question is what all landlords want to know – which one should I invest in? To determine this you would need to calculate the two areas of financial viability such as on capital gains and rental yields.
The higher rental yield will come from the Kings Point three-bed town house at around 5.03% annually, whereas the Tamebridge house would secure you 4.0%. The capital gains potential is a difficult one to advise on as you can approach it in one of two ways. Looking at the past six years since the downturn, the property prices at Kings Point increased on average about 24%. However, similar properties in Tamebridge increased on average about 18%. So, with capital gains the question is not just about the past but also the future. If you would like to discuss which property I feel will give better future returns for the long-term and why, please feel free to contact me and I would love to hear from you.
Phone: 0345 257 9850