I must admit to being quite pleased to have got the SR1
and SR2 guides out of the way, as they needed covering off but they aren’t
really the areas that we would focus on for delivering great investments –
things start getting more lucrative (and therefore more interesting!) when you
look at the SR3, SR4 and SR5 postcodes
SR3 covers a wide range of areas & property types from
the exclusive detached properties in Warden Law Lane (average transaction value
£423,673) to Somerset Street in Silksworth (average transaction value £64,636),
just over a mile away
From a rental point of view, we tend to advise that it
often makes sense to avoid either extreme, looking for properties that will
attract the large number of working tenants (be they single people, couples or
families) rather than pitching for non-working tenants on the one hand or the
small number of highly demanding executive tenants willing to rent the more
expensive properties on the other
The SR3 area has a number of different ways to cater for this
hardworking tenant ‘core market’
For first time renters, be they single people or couples
SR3 has a number of leasehold properties (flats) that represent much better
value than similar sized properties in or around the City Centre
Flats in Farringdon (such as the 1950’s built Carlisle
House on Ashford Road & Aydon House on Aberdare Road) near to the
Farringdon Academy are always popular, not only with first time renters but
also older tenants looking to downsize
We manage a number of properties in blocks in this area
and they will return 7.8 % Gross Yield based on an average purchase price of £60,000
- £65,000 and an achievable monthly rent of £425pcm – we’ve recently posted a
couple of bargain properties to the blog offering even better returns
so it’s worth keeping a close eye on the market to snap up a bargain
Even closer to the major employers in Doxford
International Business Park (such as Barclays, EDF Energy & MoreThan) are
the 1970’s built flats in Moorside and nearby Chapel Garth – again we manage
several and they are rarely empty, with a steady supply of good, working
tenants looking to live close to work or because of the good access to the rest
of the region via the A19
These flats can come with a garage (in separate blocks) and
the ground floor flats have decent private rear gardens - beyond that it’s
worth checking whether or not the original electric heating has been upgraded
to gas central heating, as this will always increase tenant appeal
A typical Moorside Flat will return 6.75% Gross Yield
based on an average price of around £80,000 and £450pcm rent
There are also flats in the Lakeside Village developments
which will rent well (however most are owner occupied with older residents who
have purchased in the 80’s through the Right to Buy scheme) so it is worth
keeping an eye on any that do come onto the market as they may be sold with
vacant possession & in need of a speedy sale
For families with children the SR3 postcode offers a
number of areas with properties that will be both appealing to tenants and will
provide decent returns for landlords
Most of the properties which will make good investments
if looking to appeal to a family are ex-council, offering a decent amount of internal
space & also the good size gardens that families prefer
Just as the flats in Farringdon are appealing to both
tenants and investors alike, we would advise investors to look at houses in
Farringdon – either a 2 bedroom semi-detached or ideally a 3 bedroom semi (3 bedrooms would be better
than 2 as they are in shorter supply & therefore will be more sought after,
not only that they will automatically suffer less ‘churn’ given the tenants are
less likely to outgrow the property)
A typical 2 bedroom, ex-council semi such as the one on
Aberdare Road from our recent blog post is £77,500 and will return 7.0% Gross
Yield based on a conservative £450pcm, a typical 3 bedroom ex-council semi will
cost £90,000 and return 7.4% based on a slightly higher £495pcm rent
In addition to Farringdon, similar ex-council properties can
be found in the nearby Plains Farm and Thorney Close estates, however we would
advise obtaining expert local advice before proceeding as whilst is it possible
to pick up a great investment, these areas do have a higher proportion of
non-working tenants in some streets so where you buy is paramount
That’s not to say these areas should be avoided outright
- we’ve just let a 3 bedroom semi in Plains Farm (in under a week) for one of
our landlords who bought it as an investment following our advice – he paid just
under £85,000 and based on the £525pcm rent will return him a healthy 7.4%
Gross Yield
The above example proves there’s clearly good investments
to be had in the SR3 postcode but as always we recommend taking expert
impartial advice before making any purchase
Please call on 0191 567 8577 or email
neil.whitfield@belvoirlettings.com for objective & impartial advice on all
aspects of property investment in Sunderland
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