knew there would be a however) before we look at yield and capital growth, one
important consideration that often many landlords tend to overlook, is the
propensity of how likely the rent will increase. Interestingly, the average rent of a Chelmsford
property currently stands at £1,012 per month, which is a rise of 1.4% compared
to twelve months ago (although it must be noted this rise in rents is for new
tenancies and not existing tenants).
Anyway, back to yield and capital growth, the average value of a Chelsmsford property currently stands at £348,800, meaning the average yield stands at 3.48% per annum, which on the face of it, many landlords would find disappointing. That is the problem with averages, so if I were to look at say 2 bed houses in Chelmsford which are the sort of properties a lot of landlords buy, in Chelmsford, the average value of a 2 bed house is £297,900, whilst the average rent for a 2 bed house is £1,046 per month, giving a yield of 4.21%. However, if that wasn't high enough, there are landlords in Chelmsford who own some specialist properties with specialist tenancies, that are achieving nearly double that yield . again it comes down to your attitude to risk and reward (give me a tinkle if you wanted a chat about those sorts of properties . although they can be fun and games!).
Ultimately investors want to be making gains from both rent and house price growth. When combined, the rental yield and capital growth gives you the return on investment, and that is what I told our University friend from Kensington. Return on investment is everything. So, looking at property values in Chelmsford have risen in the last year by 8.4%-. which means the current annual return on investment in Chelmsford for a typical 2 bed house is 12.61% a year.... not bad.
Well, my blog reading friends, if you want to read similar articles like this and what I consider to be the very best of buy to let deals in Chelmsford, irrespective of which agent is selling it, then please visit the Chelmsford Property Blog.