The easy answer to this question is quite simply ‘YES’ and an even bigger yield with the right advice. If you are prepared to purchase an older apartment then the opportunities are out there you just need to remember that you are not buying somewhere for you to live. Those new apartments look very nice but you will pay a premium for them and the rental yield will not be so good. Your tenant market will also be smaller because you will want top dollar for that new apartment and for many that is too much to pay.
We are often asked what will offer a good return on a limited budget by new investors who are looking to dip their toe into property investing for the first time and we had one such enquiry this week. The young lady in question popped her head through the door saying that she was in Dunstable for business and wanted to know what the rental market was like as she was looking for an investment. London prices where she lived were too expensive for her to purchase an investment property.
We took a quick look at the current properties on the market in her budget price range of £100,000 for which she thought she would be lucky to get a Studio or 1 bed ( remember she is from London ). Anyway our quick look found 4 potential investment properties that were 2 bed apartments on the market from £90,000 to £105,000. A bit of investigation of the potential rental values of these properties and they all showed a rental yield of between 7% & 8% and if service charges are included she was still looking at a rental yield of between 6% & 7%.
A couple of these might require some smartening up and maybe even a new kitchen and bathroom but with the money she is saving this will still be within her budget especially if she can negotiate a reduction in the asking price as she has no chain and is ready to purchase.
Very soon there is a new monthly meeting group coming to the Luton and Dunstable area. This is a national group and will be for new and existing landlords. At the meetings there will be experienced landlords offering advice and talking through their experiences and how they have grown their portfolio. There meetings are very informative and investment landlords come away from every meeting with more knowledge.
If you would like to know more please email Daniel.bourke@belvoirlettings.com
