“Thinking outside the box; a metaphor that means to think differently, unconventionally, or from a new perspective. This phrase often refers to novel or creative thinking.”
This can be certainly be applied to the approach to Buy to Let by adding a pinch of foresight and strategy to it, as it is a common trend when people look at getting involved in - or adding - a property that they often only want to buy in a ‘good area’. This is on the basis that prices will go up and, of course, that is a fair consideration but focussing on rental yields should be very high up on the agenda too.
Essentially, ‘Buy to Leters’ need to be looking at a good 10 year investment and in areas that are considered ‘less good’ there is more scope for return. To give some brief examples:
•In the price index, Brentford postcodes actually out perform W5 in Ealing.
•A 4 bed property in Brixton is worth four times more than a 3 bed house in Greenford.
•Purchasing a Buy to Let in Ealing - a good area - you are looking at a 4% yield and a 2 bed flat will cost 400k. But, if you bought two 1 bed flats in Northolt, not only would you get £20k change you would receive £70k more in rent over 10 years, as the percentage increase is better.
It is worth noting that the market is always continuing to improve and the so called good areas increase in size. West London is growing in terms of being one of these and with Crossrail approaching landlords who have Buy to Lets in west Ealing and in Hayes are realising good wins.
A key point to mull over - if you just want to buy something in a good area - is our question, “Find me any area in west London that has crashed and burned?” Just consider, before you take out your wallet, casting your net further afield and focusing your bait on the longer term and the yield to snare the big fish – and should you be considering Buy-to-Let then simply pop in to see us for an informal chat, a warm welcome and we will advise what to put on the end of your hook!