How many times have we heard the phrase “location, location, location”? We thought we’d take a look...
The best location for an investor is dependent on budget, the individual, knowledge of an area, and the kind of tenant you would like to attract. An investment property can be bought in a rural area such as Larne for as low as £50k. As expected, the further you move away from the city, the more affordable homes become. However, what you might not know is that the ratio between cost and expected rental income in a rural area can sometimes yield more than the city. In other words, you could purchase a property in Belfast for triple the price you would in a rural area, but you wouldn’t be getting triple the amount of rental income.
Example.
Location
Property Cost
Rental Income
Larne
£55,000
£425pcm
Belfast
£150,000
£725pcm
It’s not all plain sailing for rural locations though. Before you run off to invest, it is important to point out that there is a higher risk when it comes to rural properties. It is highly recommended that if you are investing in a rural area, you should be familiar with the location, the local housing market and the rental demand. Perhaps research if the local economy is developing or declining. If you have the knowledge, you could have yourself the perfect investment property. If you are not comfortable with the risk and provided that you have the money to spend, then a city property will be the best option for you.
South Belfast is one of the main areas to invest and properties here typically range from £100k to £300k. A property’s value in the city will traditionally grow at a better rate than a rural home and there will be a more consistent flow of tenants. Universities, hospitals and the city centre, are all hot spots for investment, as they attract students and young professionals. Multiple tenant properties will require an HMO licence and may need frequent repair works, which can be stressful and time consuming for the investor, but you can often find a good letting/managing agent to manage your property for you. Overall, liquidity of your investment property will generally be better in a high-profile city location, but you can still get a better return in a rural one if you are willing to take the risk.
If you would like any further information on investment properties, investment finance, managing your investment property, HMO licencing or any general questions, please do not hesitate to contact the team. Email us today info@gocestateagents.com or call us on 028 9066 2366.
