We manage a number of similar flats in this area and it will be
possible to achieve 7.3% Gross Yield with this 2 bedroom flat in Carley
Hill
It will need a little improvement (decoration, flooring and
a new kitchen) but even allowing a generous £5,000 on top of the £59,950
asking price will return the above based on £395pcm rent
One of our loyal investors only looks to the Redhouse area of
Sunderland when looking to expand his portfolio and not without good
reason - properties can often be picked up for less than elsewhere in
Sunderland and they tend to attract working families that will stay put
This 2 bedroom semi needs work - complete redecoration and
new flooring throughout and the lack of kichen and bathroom photos
should set alarm bells ringing, but even so, allowing a generous £15k on
top of the £65,000 asking price will deliver a decent 6.75% Gross Yield
based on a conservative £450pcm (£475 may even be achievable)
Farringdon is popular area which attracts decent long term tenants and houses with 3 bedroom are always better than 2 bedrooms
This 3 bedroom semi needs a little work but it will still deliver
6.6% Gross Yield based on a total investment of £90k (£84,950 + £5,000
for improvements) and £495pcm rent
This 1 bedroom ground floor flat in Downhill needs work but even
budgeting a generous £5k on top of the £35k asking price, it will
deliver 10.5% Gross Yield based on £350pcm rent
It requires redecoration and new flooring in some rooms along with new appliances
We let and manage several similar properties nearby and at this price they are popular with a range of working tenants
This 3 bedroom terrace is in good internal condition with 2 reception rooms, 3 first floor bedrooms, a decent kitchen and off street parking
Similar properties on this street have been advertised for £550pcm but even based on a more conservative £495pcm it will deliver 7.4% Gross Yield based on the asking price of £79,950
Now that we’ve been posting our recommendations on investment properties for some time I occasionally get approached by our current landlords looking for our help in offloading their properties in this way
I’m happy to help, but explain that to appeal to our investor audience the property must stack up as an investment, typically returning a Gross Yield of at least 6.5%
In the case of investors simply wishing to cash in one of their assets this is often achievable - if the property was purchased based on sound investment advice at the time it’s likely to be of interest now as it was then
Unfortunately more often than not it’s the ‘Reluctant Landlords’ who approach us, having heard that the sales market is showing signs of recovery and more often than not their property will not deliver the returns to make it of interest to an investor
If you listen to the news or read certain articles in the press you’d assume that as the sales market picks up and more properties come onto the market they will all be snapped up by investors waiting in the wings but it just doesn’t work like that – the investors are likely to be looking for very different properties in different areas to those being offered by Reluctant Landlords
As an example, using a couple of very different properties that are very close to each other, a typical (and admittedly very rentable) ‘Reluctant Landlord’ 3 bed semi-detached property in Sevenoaks Drive, Hastings Hill (SR4) will achieve £550 - 595pcm but with an average sale price of £150,000 will only return at best 4.7% Gross Yield
Compare that to something that will appeal to an investor less than half a mile down the road in Grindon; a 2 bed ex-council property will achieve £450 - £495pcm but based on an average sale price of £85,000 will deliver a much healthier 6.4% – 6.9% Gross Yield
When I tell the Reluctant Landlords that they’d need to accept nearer to £100k - £110k for their Hastings Hill property to appeal to an investor they often decide either stick to the rental market or to look at selling to owner occupiers instead!
Of course as many ‘Reluctant Landlords’ have actually had a positive experience of renting out their property in recent years, some are happy to sell up and use the funds released to purchase one or more ‘true’ investment properties
If you’d like free, independent advice on buying to let or property investment in Sunderland call 0191 567 8577 or email neil.whitfield@belvoirlettings.com
This 2 bedroom terraced 'cottage' is located close to Sunderland Royal Hospital and should get good interest from a range of tenants
Any investor buying it would need no further outlay as it's 'ready to let' and given it will realistically achieve at least £450pcm that represents a healthy Gross Yield of 7.9%
Call us on 0191 567 8577 or email neil.whitfield@belvoirlettings.com for more information
This first floor 2 bedroom Moorside flat is Brand New to the market
today so with no internal pictures it may need further investigation
over coming days
That said at £83,000 it just about stacks up as an investment - I
would advise hard negotiation to bring the price in at under £80k
Given it has electric heating you'd be looking at around £450pcm
rent & based on the asking price this would deliver an
acceptable 6.5% Gross Yield
Similar Moorside flats with gas central heating are more popular
and can command upto £495pcm (so any negotiated reduction could be used
to fund installation of gas central heating) which would
deliver higher returns
We featured a similar apartment in this block in January and this
one, which is new to the market today, is also worthy of consideration
We've rented an apartment here at £495pcm in recent months so based
on the £75k asking price it will deliver 7.9% Gross Yield - I would
factor in a little extra for decoration & new carpets but £2,000
should do it
You should base your purchase decision on the likely yield but given
this sold at the 2007 peak for £115,000 there is clearly scope for
capital growth once the sales market picks up & prices rally
I get calls from investors on a daily basis, both local landlords
renting out property in Sunderland and those from further afield looking
to invest in the area.
More often than not, local investors seem more inclined to look only
to the areas they know and seem reluctant to break out of their comfort
zone (which is typically the SR2, SR3 and SR4 postcodes).
This means they are missing out on great investments, which
ironically are often snapped up by investors from out of the area who
aren’t constrained by preconceived ideas and have a much more open mind.
This is never more apparent than when I mention areas in the SR5 postcode area in the north of Sunderland.
It’s true that parts of SR5 (particularly Castletown and Southwick)
have had their social problems in the past and have a reputation for
attracting only benefit claimant tenants but we would rarely promote
properties in these areas (and if we did would only highlight properties
which we could 100% guarantee would attract a working tenant).
I often highlight 2 or 3 bedroom properties in SR5 postcode in areas
such as Downhill, Town End Farm and Redhouse (which are not “problem
areas”) which would attract working tenants & families who often
look to stay in a property long term due to having a close family
support network nearby.
It’s possible to pick up properties in the above areas for a better
price than in comparable properties south of the river, making them
worthwhile investments and making it possible for landlords to expand
their portfolios for less.
As an example, the average price of a 2 bedroom semi in Redhouse was
£69,939 last year which would return a Gross Yield of 7.7% based on an
achievable rent of £450pcm. The average price for a comparable property
in Farringdon (SR3) or Grindon (SR4) was £75,608 & £87,696
respectively. Whilst the purchase price may be higher, the achievable
rent may be a little higher in Grindon or Farringdon (£475 - £495pcm),
returning healthy 6.5% - 7.8% Gross Yields.
Whilst the above areas would be chosen for their ability to deliver
healthy yields they would not be the areas where an investor should
automatically expect to make significant capital growth. That said, it’s
worth noting that in all three areas prices are currently 15% - 20%
down on 2007/2008 peak levels, suggesting that when the market does
improve, there is room for some capital growth.
Regular readers will know we rarely promote flats in or around the
City Centre or Ashbrooke but do suggest that the 1960’s & 70’s built
two bedroom flats in Moorside (SR3) can make good investments. The
average sale price of a Moorside flat is £78,505 and with rents ranging
from £450 - £495pcm Gross Yields of 6.8% - 7.6% can be made. A
comparable 2 bedroom flat in Downhill costs on average £59,850 and will
return 7.9% Gross Yield based on a conservative achievable rent of
£395pcm.
So clearly the above areas are worth considering based on the returns.
What’s more, given competition for tenants is often more fierce in
the more established rental areas of SR2, SR3 & SR4 due to a greater
supply of properties, landlords who are prepared to look further afield
can find that they find it easier to pick up good tenants and therefore
have less of a risk of their properties remaining empty.
If you’d like to discuss purchasing a property to let in the SR5
area or elsewhere in Sunderland or for an impartial,
objective discussion about Buy to Let in general please call 0191 567
8577 or email neil.whitfield@belvoirlettings.com
This three bedroom end terrace is being sold by auction later this month with a guide price of £54,950
It should achieve £495pcm so based on the guide price will achieve a fantastic 10.8% Gross Yield
If it gets interest and sells at the £77,500 that a similar property sold for in 2013 (the most recent sale on this street) it will still deliver a respectable 7.7% Gross Yield
Internal pictures are limited so do your due dilligence and view before bidding but it could be worth a look, even if it needs work
Three bedroom properties are in short supply in Sunderland so this one, being in good condition, will be popular with tenants
All it needs is a lick of paint to neutralise the striking colours in some rooms and it will be 'ready to let'
It's priced at £80,000 so based on a very achievable £495pcm will return 7.4% Gross Yield
This 3 bedroom end terrace in SR5 needs decoration and new flooring but even factoring this in, at £64,950 it could make a good investment
Allowing £5k for improvements it will still deliver 7.7% Gross Yield based on a conservative £450pcm rent
We highlighted this 2 bedroom end of terrace house back in October 2013 when it was on the market for £69,950
Since then it hasn't got any prettier but as it is now being auctioned later this month with a guide price of £49,950 it could make an even better investment!
As before we'd suggest £450 is achievable, so would deliver a very attractive 10.8% Gross Yield based on the guide price or if it gets bids and sells at the £70k mark it would still deliver 7.7% Gross Yield