Chichester's houses perform 50% better than flats

This article was featured in The Chichester Observer's property section on 6th November 2014.

From my experience as a landlord and letting agent I have developed a preference towards investing in and managing houses, as opposed to flats, for several reasons.

1) Rental return

Flats come with (sometimes hefty) service charges and ground rent to pay. Whilst on the face of it the average 2 bed apartment in Chichester achieves a 4.3% yield versus just 3.8% for a 2 bed house, most (if not all) of this additional return will be lost to these unavoidable and ever-increasing charges.

2) Increase in value

There’s also the fact that capital growth from houses has outperformed that of flats, both nationally and locally. In Chichester, flats have increased 23% in price over the past 5 years whilst houses have increased by 33% over the same period (that’s 50% better than flats!).

3) Tenant turnover

In general, flats have a higher tenant turnover i.e. tenants move more frequently. This is because flats are often seen as a stepping stone, with the tenant keeping one eye out for a well-suited house, complete with garden, that they can make their (more permanent) next move to.

This greater churn of tenants leads to additional wear and tear on a property, greater management time and expense in remarketing the property and will inevitably lead to more vacant periods of no rent.

4) Control over maintenance

Let’s say the roof leaks and my tenants are getting dripped on…

If it’s a house I can call a roofer, he’ll inspect the roof, spot a slipped tile and repair or replace it. Job done, everyone’s happy.

 

If it’s a flat however, it’s not the landlords roof so I have to call the management company. Only the management company won’t talk to a letting agent as I’m not the owner, so I have to call the landlord and ask them to call the management company. The landlord wonders what they’re paying me for when I’m getting them to sort things out. The management company is invariably slow to do anything about the problem. All the while my tenants are still getting dripped on and the property is potentially getting damaged due to the water ingress. The tenants aren’t happy, probably assuming I, the letting agent, can’t be bothered to help them or the landlord is a ‘rogue’.

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There are of course exceptions to these points and I look at a property on a case by case basis - in fact I own several flats myself and manage some for other landlords too. But, in general, that’s why I prefer houses to flats; they provide a better long-term return and they’re easier to manage in the meantime.

If you would like some advice about which property may be best suited for you to buy as an investment, I’m happy to have a chat about individual properties on the market and my experiences as a landlord/letting agent.

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If you are looking for an agent that is well-established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on clive@crjlettings.co.uk or call 01243 624 599.

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