Some experienced landlords and I had a discussion about the
property market in Eastwood, when the subject of risk against returns arose.
All landlords are different in the way they deal with
property. 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 getting involved, it is a good idea
to have a plan.
For a low risk investment, you could buy property in and
around the areas of Eastwood which are perceived as being more desirable, such
as Mill Road and out into Newthorpe and Giltbrook, where you may be able to
achieve an annual yield of around 4-6%. Following my article a few weeks ago,
if you don’t mind a slightly higher risk of void periods or a more varied
quality of tenant, you are likely to be rewarded with a higher annual yield of 6-8%.
This level of risk can be typically taken with cheaper terraced houses around Eastwood,
in Lynncroft for example, or the ex-local authority properties off Queens Road
South. If you are after annual yields of 8% and over, you could take more of a
risk with houses of multiple occupancy or properties in the poorer areas of
town which may attract tenants of a low quality. We manage some HMOs across the
area and if they are well presented, well positioned and well managed – they
will attract employed tenants and they can be very good income-earners for
landlords.
If you would like any advice on choosing properties, come
and see us at our office or email us.
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