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  • Property-a-holics

    Investing in Surrey

    Hello, I’m new to property investing and would like to know what the area in Surrey is like for a new investor as I am trying trying to find my “patch” ideally around Chertsey/Addlestone/Woking area as that is where I’m from.

    Are these areas suitable to make a good enough ROI to make it a worth while investment?

    Thank you!

    Bradley

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    Hi Bradley,

    Generally I think the returns in the area can be ok, though there is definitely better elsewhere. The success depends entirely on the market in my view and the south East is going through a bit of a rough time. Addlestone has the new development, though I think the capital growth for that has likely already happened and prices seem stagnant and in my personal view Brexit and that outcome will determine a lot. 

    Having said that it is a nice area, relatively affordable for Surrey and I do feel is on the up. We live in Addlestone and bought at the perfect time before a sharp increase in prices.

    We have decided to primarily invest up north though as we feel capital growth and rental returns are going to be superior there. 

    Having said that if you are local and have great knowledge and tradesman and want to be a hands on investor it doesn't mean the area isn't a good one!

    A lot of this comes down to what you want and if you find a good deal.

    Cheers

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    Is 4-5% ROI ok for you and likely no capital growth?

    other places you can get 8% ROI and more likely to get capital growth. London and surrounding can be heavily impacted by Brexit (my opinion)

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    Thank you for the advice!

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    Hi Bradley,

    Great to hear that you’re thinking of investing! It is always good to buy local and I’m glad to see that you have an idea of where you want to invest.

    In general, all the areas you’ve mentioned are decent to invest in. What sort of ROI are you comfortable with? As it depends on what you want, as to whether they would be worthwhile to invest in for yourself.

    Also, what price range are you looking at? As this may narrow down which area you are looking in.

    I hope this is helpful for yourself and if you have any further questions please don’t hesitate to ask.

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    Hello, thanks for the reply! I have originally been looking at 15% ROI after reading a few property books that always seem to manage to gain 20%+ so wasn’t to sure how realistic that would really be around here. 

    I have found rental properties in Egham for a 4 bed HMO worth £375k which have a income of £1,600 a month. Would you consider this worth while investment? As I’m sure if you travel a bit further out you may be able to get better returns in different towns.

    Thanks

    Bradley

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    That's a gross yield of 5.1% and net is probably close to Zero.

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    Not good at all then ??. Realistically I don’t think investing locally to me is going to worthwhile as the initial investment is far to high, But that’s just my thought. Please let me know if I’m wrong.

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    Traditionally London/SE gross overall yields have been heavily biased toward capital growth - maybe 4/5/6% rental gross yield and the balance from a target 15% deriving from cap growth.

    Converse applies in Midlands/North where gross rent yields can be double or even treble those in SE - with the highest rent yields being in deprived locations where capital growth will be close to nil and there may be a high element of troublesome benefit tenants.

    Many people now feel that SE prices will mark time for a while or even fall - hence Surrey may not be best place for new investment.

    HMOs will probably not be best venture for a new LL despite potential higher returns as they will be far more hands on with higher tenant turnover.

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    Hi Bradley,

    How is your search going?

    In terms of answering your question Would you consider this worthwhile investment? I don’t feel it’s right for me to say whether its worthwhile or not, it’s all down to what is best for you.

    Don’t rush into anything find the best area and property for you.

    With the HMO are you looking at what potential rent you can get as an individual 1- bed let or as a 4-bed house let?

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    Don't worry about a yield in percentage, look at actual numbers. Will your rental profits exceed your mortgage payments, leaving you with a surplus? If so, go ahead.

    Don't compare how a Northern investor invests with a southern investor. Two completely different markets.

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