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Should You Buy the Flat on Bright Street, Crewe?

Posted on July 21, 2015 by @AdminSF in Crewe Property, Flats and Apartments

I’ve been talking to a number of landlords this week about the property market. I’m always looking to see what is happening in the property market and what is a good deal etc.

So as i’ve been looking at the market i’ve seen this property which is on Bright Street in Crewe advertised at £79,950. It is a residential house that has been converted into two self contained flats bringing in a combined rent of £700 per month which gives you an annual yield of 10.5%. It is currently tenanted so will bring in income from day one.

Anyone that has spoken to me in detail will know that i’m not a fan of flats however this property is self contained which means the landlord has control over the external look of the property and the costs of any service charges that might need to be charged. This makes it a much better prospect than flats in a communal block. So lets look at the whole picture we will firstly start with the area.

Bright Street is in CW1 if we use information available to us on the area then the first port of call is the latest census information remember this was completed in 2011. The information tells us that Bright Street and the nearby surrounding streets comprise mainly of terraced properties and the majority of occupants living there are either semi skilled, unskilled workers or those on state benefits. There are slightly more males than females in the area with most people being between the ages of 45 -60 and are a single person household. Education is at a low level with the majority not achieving any GCSE’s. Therefore it is likely the people you will attract to these flats are people who are unemployed and claiming benefits. Please read my blog post about renting to HB tenants if you are considering investing in this area.

Now if we look at home.co.uk, the average rental property in CW1 is on the market for 45 days. I was surprised to see rooms, flats and houses are taking on average the same time to let at 45 days for each of them.

So we now have lots of information about the area, the people who live their and the property type. This property is returning a high yield at 10.5% but this is only half the story and you need to consider the capital growth of the property and as we can only look back and not forward we can see just how it has been performing. So lets look at this, over the last three months property has risen by 1.39% and over the last year prices have risen by 1.71% which to be honest isn’t that much. If we look over a longer period say five years then prices have risen by 7.47% which shows that property prices have risen on average by 1.5% per year, teamed with an annual 10.5% yield isn’t a bad investment.

This property has good monthly returns but you need to consider the type of tenant you are likely to attract. Someone claiming benefits may take more management and may require more ongoing investment as single people are often more transient than families.

Don’t forget that it may also be more difficult to sell a house which has been converted into two flats rather than a traditional house as you are only really attracting other buy to let investors.

So after looking at all the information, do you think the flat on Bright Street, Crewe a good investment?

The changes in the budget may well affect you depending on your circumstances. I strongly advise you to speak to your financial advisor or accountant before making any offers. They will look at your individual circumstances and give you best advice.

Remember buy to let property is an investment and therefore you need to understand what you want from your investment and your exit plan which could be to sell the property or pass it onto your children. With all this information you can then decide if property investment is for you.

If you want to talk about property then please give me a call or email me. My email is info@sarahfaulkner.co.uk , or call me on 01270 661395 for a no obligation chat

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