One of our buy to let landlords has until now invested only in Loughborough town and he asked us about diversifying into the villages. This prompted a lengthy discussion about the merits of the surrounding villages and towns with regard to investment potential and we looked at demand, property prices and rent levels.
Typically in Loughborough where this landlord has his portfolio there is a lot of one and two bed rental properties & rental demand. There are also many student properties which can skew the average rental figures. Taking those student rent figures out and narrowing our focus to one and two bed private lets, both houses and flats, we found an average rent this week in the town of £515 pcm; pretty much in keeping with this landlords experiences.
In the villages we found average pcm rents from £512.50 in Sileby through to £517.50 in Mountsorrel, £550 in Quorn and then £475 across the other villages such as Shepshed, Hathern, Belton etc. As expected, Wymeswold and Woodhouse/Woodhouse Eaves stood out as particularly high rental values and therefore we took those out so as not to skew the figures.
Throughout the villages sales volumes are on the rise as the market picks up and prices are creeping up in most places (there are exceptions). In general when we picked out specific properties we found average gross yields calculated from annual gross rent divided by purchase price, were remarkably similar across the area, including Loughborough. As this landlord has the resources to do refurbishments on properties we decided in this instance to look for cheap properties in the villages in need of work so he could gear up his return by adding value. We’ve also suggested he contact other Belvoir offices in the Midlands region with a view to diversifying still more.
Deciding on a good investment property can come right down to street level so decide what return you want to make (within reason!), get some local expertise and narrow down the options carefully.
