A landlord with a small property portfolio came into our office on Birmingham Road, Sutton Coldfield last week.He lives in Streetly, and has properties in both Sutton Coldfield and Erdington. He wanted to ask our opinion on where he should his next buy-to-let property.
Erdington outperforms Sutton Coldfield by 46%
Looking at Sutton Coldfield, the average property price can be an impressive £268,723 and the average rent is equally high at £781 per month. In Erdington, an average property is £128,234 and the average rent is only £541 per month. The annual yield in Sutton Coldfield could be only 3.5% per year, compared to Erdington where he could achieve an annual yield of nearer 5.1%.
It made me consider two other towns close by, Great Barr and Water Orton. In Great Barr, I was surprised to find property values are much higher than in Erdington, with an average property price of £142,207. They have an average rent of £595 per month, which could achieve a yield of 5.0%. The average price of a property in Water Orton is £201,340, with rents of around £464 per month. This could achieve a yield of 2.8% per year.
This is odd in terms of averages, because the properties I have let in Water Orton have an average of £625 per month is more to what you would expect at 3.7% annual yield. It goes to show Erdington can be a good area for an investment property, but it is a decision that shouldn't be taken lightly. These are only averages, so the yields for some small to medium sized properties in popular areas of Erdington can achieve yields of 5.5% to 7.5% per year.