Many buy-to-let investors
would consider a 5% return exceptionally good, so what would you say to a
property offering over 6%? Such properties are exceptionally hard to
find, especially in zone 2, but if you venture a little further away from the
train and tube stations you’ll find your options start to open up.
Take this 1 bedroom
ex-local flat just off Tulse Hill.
Bus links up to Brixton are excellent
meaning that commuting into central London is still a perfectly viable option
and you get a lot more for your money than you would in the more traditional
locations. Admittedly this property needs a visit from the builders, but
once renovated would fetch around £1050pcm giving a return of 6.3% at the
asking price of just £200,000.
It’s well documented that
parts of Lambeth have seen substantial price growth over the past 5 years, and
many investors are now looking for the next big thing. With the majority
of first time buyers priced out of more central locations, we’re starting to
see residential areas over ½ a mile from the tube deliver a similar level of
price growth.
A similar flat sold in
2007 for £156,000 which means an increase of 28% in the 8 years to 2015.
This is nothing to write home about, but the real growth is yet to come.
This flat could quite easily be worth £240,000 in a year’s time, and £280,000
the year after that.
20% a year capital growth
here is a very real possibility, and while you wait for your investment to go
up in value, the 6% rental yield will do a good job of paying your mortgage!
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