I recently
spoke to a couple who were considering buying their first buy to let property
in Melton Mowbray.
They live in a nice 4 bed detached house near the
Country Park and wanted something so it would add to their pension plans. We
discussed investing in a rental property suitable for the high number of
families looking to rent in Melton Mowbray, so it would need at least 3
bedrooms.
One of the most important considerations you will make before
investing is the balance between annual return (yield) and the annual value
increase (capital growth).
Wymondham Way
on the Country Park
estate is a very popular area for families. As they lived there themselves, we
looked at the average three bedroom semi-detached house sells at around
£152,000 and rents are roughly £625 per calendar month. However, we also looked
at Limes Avenue. On that street, a three bedroom terrace property can be
bought for around £112,000 and the achievable rents can be around £525 per
calendar month. The yield which could be achieved from property on Wymondham
Way is around 4.93% per year, which is compared
to the possible 5.6% per year on Limes Avenue.
I
was quite surprised to find that three bedroom terrace properties on Limes
Avenue have outperformed those on Wymondham Way. However, we must remember that
yield is not the sole consideration when investing in Buy to Let properties
