Monday 13 August 2018

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Chichester, £259,950, 4.5% yield

2 bed house, Adelaide Road, Chichesterkitchenlounge

2 bed house in Chichester
Listed for sale on 23/02/18 @ £279,950
Now = £259,950
Rent = £975pcm
Yield = 4.5%

Last sold for £250,000 in 2015 (+4% in 3 year)

I had someone a couple of weeks ago contact me to say he doesn't invest in property in Chichester as there's little to no capital growth. This puzzled me slightly, but then it transpired he had based the growth rate on one of my previous buy-to-let deals of the week. The whole point of these is that I pick decent properties that offer good value - and often that means the price is lower than expected and thus so is the growth compared to what the previous buyer paid.

And so it is with this week's pick - a large two-bedroom freehold house in a central location and in great condition. And yet the previous buyer (who paid £250,000 in 2015) has seen just a 4% in three years increase based on its current asking price of £259,950. When you factor in the replacement oven, hob, extractor, bathroom floor, new shower cubicle and the buying & selling costs you may surmise that property in Chichester has been a bad bet since then. 

Firstly though, that asking price has dropped £20,000 (7%) since it was valued and marketed in February - bad news for them, but good news for us. Secondly, that takes this property in isolation; Chichester's property prices as a whole have increased 13% in the past three years. This to me also accentuates the point that property should be seen as a long-term endeavour (and that you make your money when you buy) - three years is certainly not long-term.

In fact, the story behind this one is a little odd, what with it being purchased in late 2015 but only let in January 2017 (for £950pcm), before being put back up for sale one year later. Such is this property's size, location and good condition, I think it could command £975pcm. That would provide a 4.5% rental yield based on the current asking price. 

Looking back further at the sales history shows it was sold for £152,000 in 2002 - meaning there was a 64% gain between 2002 and 2015 (5%pa). Even better was the fact it sold for £74,000 in 1998, meaning someone more than doubled their money in just four years (a whopping 26%pa)!

Whilst I can't guarantee future capital growth, I can say this house is a great size, in excellent condition and in a decent location that will be popular with tenants. With little work required and a solid rental return, I think it is an excellent prospect for a canny buyer who can now purchase the property at a great price (the first step to helping towards future capital growth i.e. making your money when you buy by carefully choosing what you buy!).

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link: 

If your are looking for an agent that is well-establishedprofessional 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 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:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

Chichester rental valuation

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