If you are thinking of investing in property you need to consider the growth on the capital invested in a property as well as the rental yield you can be likely to expect.
I looked through the figure for properties in Melton Mowbray and this week I concentrated on my firm favourite a modern 2 bed house.
There are a few developments that were built around 10 years ago – still modern enough to be built with efficiency in mind and you would expect them to be low maintenance for the next 10 years.
Using Rightmove’s log of sold prices you can see exactly what each house was purchased for and what they have recently sold for as the data is collected from the Land Registry.
I found modern 2 bed properties that had been bought in 2005 and sold again in 2016 had seen an average of 11.5% growth in the capital over this time. When you consider during this 10 year period we have also had a double dip recession I think that’s pretty good going.
The rental income on these has also increased over this time. Back in 2005 we would be getting £525pcm for these 2 beds and now we are getting £595pcm.
Asfordby has also seen an increase on the 2 bed houses built around the same time, these have seen a 15% growth in capital since 2005. There are not many of these types of houses in our area though as a lot of the new building stopped around 2008.
If you consider purchasing a brand new property in 2017 you can expect to pay a premium and unless a deal can be negotiated with the developer the yields are not always favourable for investors – this is why many like the properties built around 2005.
The difficulty for investors is getting hold of these types of properties. They don’t come on to the market very often and they sell quickly. Keep an eye on my blog for properties coming up for sale in the Melton area.