Thursday, 23 July 2015
Flats in Eastwood, are they good investments?
Many investors, especially those starting out, like to consider flats as their first investment…but some of our local towns don’t tend to have too many so I thought I would have a look at Eastwood to see what could be gleaned.
There are over 350 flats in Eastwood. This only represents around 1.2% of the housing stock here, with the national average being nearer 17.5% and the average across Nottinghamshire being around 7%. This backs up the impression that there aren’t that many flats around in parts of our region. The “Luxury Apartment” boom of the 90s and Noughties didn’t quite extend this far it seems. The average price of flats with one or two bedrooms in Eastwood is around £107,000, which is nearly 2% higher than 12 months ago.
You can buy a two bedroom flat in the Elevation Place development on Nottingham Road, for £115,000. If a landlord put down a £20,000 deposit and borrowed the rest, they could achieve around £525 per month in rent. Even after paying the service charge, yield on debt could approach 6.5% per year. However, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing. Other established flats in the area have tended to command lower rents this year – typically upto £495 for 2 beds, but equally they are cheaper to buy.
Finally, let’s not forget about the potential increase in capital value of the property. I was looking at those flats in the Elevation Place development, which was built just before the crash of 2008 and found that they have sold for between £100,000 and £114,000 just before the crash but dropped back to around £85,000 afterwards. These have now recovered and more so to the prices of around £115,000 now and who is not to say we couldn’t see further growth in the future.
If you would like some advice about what could make a good investment, please visit our offices.