A Landlord of ours was after advice about property in Andover with a reasonable yield but that also should keep up with price increases in the area and not hit a ceiling, as some properties can so I did a bit of research for him.
I found a four bedroom detached property with integral garage on the very popular estate of Winton Chase was bought in July 2013 for £240,000. It was then sold on in June of this year for £360,000, a huge 50% increase in a relatively short space of time. Admittedly it had undergone some upgrading and the market had naturally gone up over that period but still a very impressive increase none the less. Across the SP10 region average prices have gone up by 29% so this property has performed very well. You should achieve a rental value on a property like this of around £1300pcm thereby giving a yield of 4.3% which is respectable. Therefore if you can find a property like this, needing a little tlc you can make a sensible return and benefit from the re-sale value when you are ready to sell on.
If your budget is slightly more modest there are still opportunities out there. I found a two bedroom flat on Woodpeckers, Heather Drive which sold in January 2014 for £115,000 then resold in July this year for £145,000 giving an increase over that period of around 26% which, again, is pretty good. Add to this a rental value of £675pcm this will give you a yield of 5.5% which is about right for the area.
So, its all about knowing what you can do to a property to lift the value without just relying on natural uplift as this doesn’t always happen but making sure it will give you a good rental return as well.
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