What areas in London are a good location to buy to let?
Asked on Jan 11 2013,
Renting in Harrow |
London properties, while commanding high levels of rent, can often not have the highest levels of yield, so it is important to make sure that you are buying in the right area. In the centre of the city, where houses are at their priciest for example, it can be hard to see yields greater than two to three per cent.
For this reason, I would suggest that it is actually better to buy in the outskirts, where there will be a lot of commuters and possibly families looking to head to. Good transport links into the city will be important, as well as things like a high number of schools and a number of shops to save them from having to travel into the city each day.
To choose somewhere then, you might look at something like Enfield or High Gate, areas that are outwith central London, but have easy access into the city, meaning that property does not cost as much to buy, but will still be in high demand for tenants.
Answered on Jan 29 2013,
As a London agent I would actually strongly disagree with several comments below from Scott. In london you should expect an average yield of 5-6% (certainly NOT 2-3) however this can be pushed.
It also depends what is important to you- the instant return from the rent or the capital appreciation over time.
Here are a few guide tips on this:
Always look for property you can buy and improve- improvements mean an increase in BOTH rental & capital value. We source a lot of 'cosmetically dated' properties for clients which need a refit but nothing structural. We typically advise clients that a cosmetic refit should pay for itself within 3 years from the rent increase.
If rental return is key then ExLA properties make a great BTL investment often returning 8-10% yields but you do forfeit capital value growth as they are less desirable and there is less demand overall.
Pick an area and focus on it. Understand the local market, properties most in demand, peak times of year, etc. All of this helps you find the right property and market it at the best time to get the highest rents & minimise or eliminate void periods.
Web reference: http://www.baseps.co.uk
Answered on May 23 2013,
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