I was talking with a friend this week who lives in a 1970’s four bed detached house on the Shawclough estate, on the Northern edge of Rochdale. The whole area was primarily developed in the 1960’s to 1980’s and offers mostly larger executive detached houses and also a few modern semis and town houses.
Interestingly though, of the 4,142 properties in the area, 1,377 of them are detached or 33.2%, compared to a 15.4% average in Rochdale as a whole. Something that wouldn’t happen today with the price of land (there would be more semis and town houses)!
Anyway, with that in mind, as he had come into some money, he wanted to buy a property in the immediate area to let out. It would be his first buy-to-let property and had noticed our previous articles, so was interested in getting to know the industry a little bit more. As he has lived in the Shawclough / Healey area for over eight years he felt comfortable investing around there as he knew it well and so we started to discuss the property market in this area.
I found out there were only 418 rented houses in his area of 4,142 properties, making it one of the lowest percentage areas for private renting in Rochdale I have seen at 10.1% compared to the Rochdale average of 12%.
Whilst he lived himself in a nice four bed executive house, the investment potential of those larger four beds wasn’t good, as the highest yield (return) they could expect was only around 4% per year. However, the larger four beds though in the Shawclough / Healey area have certainly increased in value at over twice the rate than other areas in Rochdale (values in Shawclough / Healey have risen by 20.4% since 2004, compared to the Rochdale average of 9%).
Investing in property is a balance between capital growth and a decent yield. I was able to tell him that the three bed semi detached houses on the same development, can be bought for around £120,000 and they rent for around £600 per month, a reasonable yield of 6% per year, and those have increased by on average 127% since 1999. A good balance I think you would agree? It all comes down to personal choice. Each landlord has different priorities for their buy to let investments.
Unlike most agents, I will look at the whole of the market and if you want to pick my brains on what would make the best buy to let investment for you, feel free to contact me by emailing me on firstname.lastname@example.org
Alternatively why not pop into our offices on Cheetham Street or give us a call on 01706 648277?