A slightly different angle for this week's buy-to-let deal; generally I'll pick out a property that offers a good balance between capital growth, rental yield and ultimately value, which normally occurs in the £175,000 - £325,000 price range. This week however I met a landlord who had a budget of £500,000. Now, at this point I'd often say to split such a pot of money in half and buy two properties, which together would produce a better yield and prevent 'putting all your eggs in one basket'. However, this particular individual was adamant they wanted just the one property, so I thought I'd bring you what I feel is a good buy-to-let deal on the basis you specifically want to spend up to £500,000 on a single property in Chichester.
So, steering the investor away from the new-build city centre 2 bedroom apartments priced at £499,995 I found this, a 5 bedroom detached house close to St. Richard's Hospital.
Priced at £475,000, it is a little below budget...although not when you factor in the (eye-watering) £28,000 stamp duty (bearing in mind it has the additional 3% 'second home' penalty).
Fundamentally I chose this house because of its location, size (around 1,900 square feet plus a driveway and garage) and age. The location near to the hospital should mean there is always a demand from tenants to rent the property. The good square footage fundamentally means it offers reasonable value, along with the flexibility in renting to a family or, if required, sharers (with a little re-configuration, and a HMO licence, it could offer up 7-8 rooms). Its age should mean there is less maintenance than taking on an older property and newer homes tend to appeal to tenants (particularly large families) who want a clean, modern house to call home.
The leftover furniture in the pictures suggests it was previously rented to students. Assuming instead it is rented to a family-unit, I would expect a rent of £1,600pcm. This would mean a rental yield of 4.0%, which is slightly lower than the buy-to-let deals I normally feature, but for this amount of capital is actually a very decent return.
It also seems more logical to me that long-term it will increase in value better than, say, the similarly priced new-build two bedroom apartments in the city centre, which (as great as their location may be) at around a third the size of this house doesn't offer as good value for money to me. Plus, I'm always sniffing out the best valued property, and this house is the cheapest with 5 bedrooms in Chichester...by some £105,000!
It is on the market with King & Chasemore and full details can be found on Rightmove via the following link:
www.rightmove.co.uk/property-for-sale/property-52091826.html
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Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:
c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP
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