Thursday, 3 September 2015
Monopoly in Heanor... How would you play?
A couple of local landlords and I had a discussion about the property market in Heanor, when the subject of risk against returns arose.
All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.
For a low risk investment, you could buy property in the areas of Heanor which are perceived as being more desirable, such as to the west of the town off the Heanor Road such as the modern properties on Sovereign Way or Sandringham Drive, where you may be able to achieve an annual yield of around 4-6%. Following on from my previous articles, if you don’t mind a slightly higher risk of void periods or a more variable quality of tenant, and you ae prepared to look elsewhere in the town, then you are likely to be rewarded with a higher annual yield of 6-8%. This level of risk can be typically taken with older terraced houses around Heanor. For example we manage many variants on the side streets off the A6007.
If you are after annual yields of over 8%, you could take more of a risk with houses of multiple occupancy or properties in the poorest areas of town which may attract tenants of a low quality.
If you would like any advice on choosing properties, come and see us at our office or email us.