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Having a chat with a few landlord friends at dinner last night... had an interesting debate.
Better strategy out of ...
Higher yield properties up north?
Higher yield less desireable properties down south... ie above shops, non standard construction.
We are all greater london landlords and the average yields we get atm are 4% or lower.
Up north or less desirable southerns on the face of it can yield 6% plus easily.
Closer so easier to keep an eye on
Areas we know already
Max 60% ltv and smaller pool of lenders so higher rates
Capital appreciation seems to be lower
Higher tenant turnover
Higher buildings insurance
Better capital growth potential
Cheaper standard mortgages
Houses instead of flats
Far away so need to be managed
Maybe missed the boat for capital growth in manchester birmingham leeds etcAny thoughts or pros and cons i have missed?
This is a great topic for discussion and here are some previous related threads:Why higher value properties are betterCheap Houses in North-West: Dangerous? For what it is worth, I have always found that our southern stock has better quality tenants, less tenant turnover, and higher capital growth and has been easy to sell. However, when we put our 4 bed house on the market in Manchester around 2 years ago, we didn't get a single viewing, so we've kept it.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Why did you put "houses instead of flats" as a positive? Just curios.
No freeholder or management co to deal with
No lease which shortens every year
Management companies and freeholders can be a positive or a negative
Economies of scale sometimes with major works and they project manage for you
They can add value with things like new windows / doors
If the roof leaks in the storms like last week you are not arranging the scaffolding to go up the next day
Short leases also provide an opportunity to buy below MV and extend the lease
Make 10K for some extra paperwork is an opportunity to capitalise on someones elses laziness
Jonathan Clarke. http://www.buytoletmk.com
The simple answer is Purchase in the area you understand best
The North is fine but like every thing else Know your area
I could show you fantastic deals in the NE which look super But I could pull the wool over an investors eyes quite easily and sell them a dud
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Know your area is very important. It is very risky going to places you don’t know and you can end up with a lemon.
Maybe it should be highlighted that UK does not only have South and North, prices are different in Southampton compared to Brighton, their are also The midlands, Wales and Cornwall.
I am a SE LL with more properties outside SE as yield is just poor.
Holiday lets are doing very well on yields according to this latest news:New research from holiday property fund, Second Estates, has revealed that providing owners with yields of 11.7% over the past twelve months, Wales has been crowned the best area for holiday lets followed by Northumberland where investors saw yields of 11.5%.Full/source articleSee our comprehensive guide: Guide to sourcing & setting up a holiday let
When the down turn happens your northern properties will fall in price much more than the southern properties.Also northern properties will see an increase in rent arrears.- which is already happening.Similar dinner story years ago when everyone wanted to be in the lloyds market- everyone when bust. As I have said before the property game is over for this cycle and will be much cheaper over the next 2/3 years.
Your correct the North falls faster and recovers slowly
But I believe we will see a levelling off on all areas going forward
Its not in anyone's interest to have property prices rising fast It hs to be slowly slowly from here
The nature of a recession is all assets prices get hit, and those leveraged the most get hit the most. Ie those with lots of house up north because they were cheaper to buy than down south will suffer the most.Those on low wages will feel the pinch and they are the ones renting properties. As said before rent arrears are increasing by the day.