A landlord came to our office for advice, just before Christmas, asking whether he should buy a two bedroomed semi-detached house in the Somerby Hill or Gonerby Hill Foot area of Grantham.
We did some research and found that a nice two bedroomed semi-detached house on Briarwood Close, a cul-de-sac to the right of Hazelwood Drive in the Gonerby Hill Foot, for £96,500. We worked out the possible rent for this as £425 per month, which could achieve an annual yield of 5.3%. The properties in this area are quite popular with families and tend to have a great demand with investors and tenants alike, making it a relatively good investment.
A similar two bedroomed semi-detached house on Holly Close, near Bridge End Grove in the Somerby Hill area, approximately two and a half miles away, has a value of £104,950. The possible rent for this property is slightly higher, at £475 per month, as it is slightly larger than the one on Briarwood Close. We found that although the rent can be higher, the annual yield was similar at 5.4%.
This shows that while a property can achieve a higher rents, it does not necessarily mean higher returns.
If you would like any advice when choosing properties, you may come and see us at our office on St Peters Hill.
