I spoke to a new landlord recently who was keen to buy a property in Chichester to rent out. With a limited budget he asked me whether a one bedroom property would be a decent investment or whether he should stretch to a two bedroom home.
Chichester’s one bedroom properties range in price from £130,000 to £325,000.
Two bedroom homes in Chichester currently start at £159,000, whilst the most
expensive is a two bedroom bungalow priced at £799,000!
If we look at current asking prices, we can see the average one bedroom
property in Chichester is priced at £179,950 and the average rent for a one bed
property in Chichester is £750pcm. This suggests an average yield of 5% for one
bedroom properties in Chichester.
This compares to an average yield of just 3.9% for two bedroom
properties in Chichester. This is derived from an average asking price currently
of £295,000 and an average rent of £950pcm.
This suggests that one bedroom properties are the way to go when buying
to let in Chichester.
However, if we look at the capital growth (increase in value) over the
past two years, we see that one bedroom homes have increased just 1% in
Chichester in this time, whilst two bedroom properties have outperformed this,
increasing by 8%.
That means whilst a one bedroom property on the face of it appears to
offer the better return, it is in fact two bedroom homes that have given a
better overall return in Chichester over the past two years (15.8% vs 11%).
I’d also argue that two bedroom properties tend to rent out slightly
easier, with fewer void periods and longer-term tenants. A two bedroom property
should also be easier to sell in the future as it appeals to a wider variety of
buyers.
This train of thought is backed up by the statistics, as the average
time to sell a one bedroom property in Chichester is currently 126 days,
compared to just 87 days for two bedroom homes.
With a budget of £180,000, this particular landlord could make the
decision to invest in a ‘nice’ one bedroom property or a ‘low-end’ two bedroom property
in Chichester. This would have a bearing on the type of tenants likely to rent the
property, which may also be something to consider. It is also true that often the
‘low-end’ stock tends not to increase in value as much as the ‘nice’ properties
either.
As you can see, there are many different variables and considerations to
bear in mind when thinking of investing in buy-to-let. If you’d like to discuss
the options available to you, please get in touch.
Clive Janes, CRJ Lettings.
www.crjlettings.co.uk
(This article was featured in the Chichester Observer's property section on 24th November 2016)
Clive Janes, CRJ Lettings.
www.crjlettings.co.uk
___________________________________
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.
Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:
Follow The Buy-To-Let Property Investment Market in Chichester
Chichester Property Market LinkedIn Page for Clive Janes
CRJ Letting Agents Chichester Facebook Page
CRJ Letting Agents Chichester Twitter Page
Chichester Investment Property Management Specialist CRJ Letting Agents Website
Chichester Property Market LinkedIn Page for Clive Janes
CRJ Letting Agents Chichester Facebook Page
CRJ Letting Agents Chichester Twitter Page
Chichester Investment Property Management Specialist CRJ Letting Agents Website
c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP
__________________________________
No comments:
Post a Comment