There are many bargains to be found if you are looking in the right place at the right time and to find one of these the best advice would probably be to be the Estate Agents friend and to keep in constant contact. Don’t wait for the Estate Agent to call you.
We will highlight some of the best performers to show that with the right advice from someone at Belvoir you can achieve a rental yield you didn’t think was possible and with the housing market seemingly improving also there is capital yield to be considered also.
This week the following property has caught my eye. A 2 bed apartment in Carlow Court, on West St in Dunstable which is on the market for £650pcm
To be honest it is not the prettiest of buildings, but it is within walking distance of the town centre and has a parking space. It has also been completely redecorated, new carpets fitted and a new Kitchen installed.
Priced at £650 it is bang on the average rental value for a 2 bed apartment in Dunstable and the work that has been carried out might warrant the asking price.
Now for the unbelievable part. This apartment was on the market for sale in August 2012 for £100,000. If it was purchased at this price and let for £650pcm then the base rental yield would be a healthy 7.8%. Not bad when you are comparing to current bank rates but this has caught my eye for a reason. This apartment actually sold in April 2013 for only £71,000 ! Yes a drop of £29,000 !
Now I could tell you that the base rental yield on this property is therefore 11% but the new owner did carry out some moderate repairs. I notice the old boiler is still in place so a redecorating job, new carpets and kitchen would seem to be the extent of the refurbishment. No mention or pictures of the bathroom so I presume the original s still there. If we say £5,000 was spent on it then the owner is still looking at a base rental yield of 10%.
Of course when calculating rental yields you need to include other costs such as service charges, Letting Agent fees to find a tenant and allow for some repairs during the tenancy. You might also chose to use a specialist agent such as Belvoir to manage your property, but I would still expect a rental yield of over 8% on this property after these costs are included.
This just goes to show that with the right help and advice there are still plenty of bargains to be found.
Whether you are a landlord of ours or not, drop by our offices on Church St in Dunstable where you can talk to me, Daniel or my colleague Zara if you would like any advice…
