Talking to a landlord about his first buy to let purchase, a two bedroom top floor flat in a council built block in Crawley, we realised it could now be worth £50,000 more than it was purchsed for 8 years ago. It was one of the original 1950’s blocks built by the new town commission and had good sized, a balcony and a new kitchen. One viewer had said “I wasn’t sure from the outside but once through the door it was lovely”.
The purchase price was £137,000 in 2006 and the value climbed, a similar flat sold for £145,000 in 2007 but then the crash came. However with a rental income of £800 per month the yield was 7.01%. The base rate plummeted to 0.5% but this landlord was getting 7.01% on his investment, 2 years ago that increased to 7.33% when the rent increased to £825 per month.
This landlords flat is still tenanted, in fact the rent has just been reviewed upwards and he is still getting a great yield. There haven’t been any recent sales in the road but as property prices have been increasing across Crawley I’m sure my landlords flat is back to its 2006 purchase price and may have even risen beyond the ceiling price the flats achieved in 2007, we have seen similar properties being marketed at £185,000.