A landlord came to our office for advice a few weeks ago, asking whether he should buy a two bedroom house in the Melbourne or Chelmer Village area of Chelmsford.
We did some research and found that a nice two bedroom end of terrace house on Kings Road, a road leading to North Avenue in the Melbourne, for £185,000. We worked out the possible rent for this as £725 per month, which could achieve an annual yield of 4.7%. The properties in this area are quite popular with families and tend to have a great demand with investors and tenants alike, making it a relatively good investment.
A similar two bedroom terrace house on Jenner Mead , Off Henniker Gate in the Chelmer Village area, approximately four miles away across the City, has a value of £220,000. The possible rent for this property is slightly higher, at £850 per month, as it is slightly larger than the one on Kings Road. We found that although the rent can be higher, the annual yield was similar at 4.6%.
This shows that while a property can achieve a higher rents, it does not necessarily mean higher returns.
If you would like any advice when choosing properties, you may come and see us at our office on Duke Street.