A couple of local landlords and I had a chat about the property market in Andover when the subject of risk against returns came up.
All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield / return on their investment for an increased certainty of finding a quality “professional” tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.
For a low risk investment, you could buy property in the areas of Andover which are perceived as being more desirable, such as Saxon Fields, Picket Twenty, and the older parts of town like the Ferndale Road area where you may be able to achieve an annual yield of around 4-5%. Following my recent article, if you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 5-7%. This level of risk can be typically taken with ex local authority properties such as King Arthurs Way, Admirals Way and so on. If you are after annual yields of 8% and over, you could take more of a risk with houses of multiple occupancy but this is a whole different ball game and needs very careful managing but the reward can be good.
If you would like any advice on choosing properties, come and see us at our office or email us.