One of my out of Town property landlords called me as he was coming to visit his family and friends towards the end of the month during the Easter break. He was born and brought up in Walsall and went to the Alumwell Business and Enterprise College which, as he recalls, used to be called the Alumwell Secondary School (way before my time of course!!).
To enhance his retirement, he has a small portfolio of four properties in the Walsall and surrounding area and wanted my advice on where to purchase his next buy to let property. As a University lecturer he lives in a college-owned flat and would never dream of buying where he lives in Kensington where the average value of a flat is £1.62m and a house averages out at £4.1m.
Before I could advise him, I reminded him that the most important thing when considering investing in property is finding a Walsall property investment with decent rental yields for income returns, yet at the same time it must have the potential for capital growth from rising house prices over time.
Going into the Spring of 2016, Walsall property landlords will be under more pressure to find the best permutation of yields and capital growth, as extra stamp duty charges for buy-to-let properties and a squeeze on mortgage interest relief will raise their ongoing costs.
Before we look at yield and capital growth, one important consideration that often many landlords in Walsall tend to overlook is the propensity of how likely it is that the rental incomes for their property investments will increase.
Interestingly, the average rent of a property in Walsall currently stands at £607 (taking an average from 1 bed to 4 beds) per month, which is a rise of 2.85% compared to 12 months ago – although it must be noted this rise in rents is for new tenancies and not existing professional tenants in various postcodes.
Back to yield and capital growth: the average value of a Walsall property currently stands at £158,815 meaning that the average yield stands at 4.59% per annum.
However, if that wasn’t high enough, there are property landlords in Walsall who own some specialist properties with specialist tenancies that are achieving even higher than that, such as Student or Houses under Multiple Occupancy. It all comes down to your attitude to risk and reward – give me a call if you want a chat about those sorts of properties.
Ultimately buy-to-let investors want to be making gains from both rent and house price growth. When combined, the rental yield and capital growth gives you the return on investment, and that is what I told my landlord from the posh end of London.
Return on investment is everything; so you need to ensure you make a sound investment which meets your current needs of today at the same time ensuring, growth for the future.
So, looking at property values in Walsall, they have risen in the last year by 7.32% – which means that the current annual return on investment in Walsall for a typical property is 11.9% a year.
Not too shabby a return, given the global economic picture in 2016.
If you are thinking of purchasing a buy to let in Walsall then you want to ensure you are getting the right advice from the right place. I can source the property which suits you and guide you through the entire process from the initial accompanied viewings – negotiating – mortgages – the legal stuff and finally finding a tenant. Don’t be afraid to pick up the phone or email me a link to the property you are thinking of purchasing. I will always give you my honest opinion.
Phone: 01922 311016