Following a
blog post about what type of flat in Warrington would make the ideal investment,
I had an interesting chat with a local private landlord who popped into the
office for a brew and to ask some interesting questions about how flats in
Warrington really measure up. (If you missed my blog post about flats, you can
find it on the link here: Which Flat Should I Buy in
Warrington?)
Paul has religiously
stuck with a strategy of two bedroom terraced houses. He’s been picking them up
for around £75k to £80k in Warrington and achieving a healthy yield of over 7%. However, he has realised that when it
comes to selling these houses in the future, there will not be much growth in them.
Paul came into
the office to discuss flats and the options when investing in flats in
Warrington. Now, you all know my personal opinion on flats in general – if you
don’t, you can find my opinions explained in past articles. However, take a
look at the research I have done below.
Flat Statistics
There are over
21,200 flats in Warrington. This
only represents around 7.5% of the
housing stock here, with the national
average being nearer 17.7%. The average price of a two
bedroom flat in Warrington is around £95,000, which is nearly 2% lower
than 12 months ago.
You can buy a
two bedroom flat in the development on Sixpenny Fields for a very reasonable £79,950. If you were to invest in a
flat like this, you can expect a rental income of around £525 per month. Even after paying the service charge, usually
around £1000 per year, yields could reach around 6.6% per year.
However, you must remember that every landlord’s tax and interest rates
are different, so it is essential to
research your investment carefully before committing.
Now 6.6% is
not as attractive as the yields you can achieve on a two bedroom terrace – plus
all the extras such as the service and maintenance charges mentioned above.
Capital Growth
Finally, let’s
not forget about the potential increase in capital value of the property. I
started looking at the history of the two bedroom flats in the Sixpenny Fields
development and found that they sold for
around £125,000 during the boom in 2006. This has dropped dramatically
since. Over the last 10 years, you can see that the value of these flats has
started to reduce and during 2015/16, the
average sales are around £77,500 - £79,000.
Potentially, these flats could go back up to similar prices they first sold at in 2006 in the future.
As we know,
investing in property is not a get rich quick scheme. It takes a lot of time,
hard work and much more. Paul is in this for the long haul, so we will work
closely in finding him the right flat with future growth. The numbers I have
used are averages. If you can pick up a nice 2 bedroom flat in similar
developments to Sixpenny Fields in Warrington for the right price, then you can
look forward to some great growth.
I always tell my landlords that you make your money on the purchase
price.
Make sure
you’re doing your research daily, as
you don’t want to miss that perfect opportunity – and they do crop up in Warrington
from time to time.
As always, if
you are an investor in the Warrington property market and would like a second
opinion on a property you have seen, then send the URL of the properties you
have seen online over to me. Or if you would like to pop in and have a chat,
then you can either email me on manoj@hamletwarrington.co.uk or
call on 01925 235 338. Our
address is 6 Bankside,
Crosfield Street (opposite Iceland and Aldi – so plenty of parking
available). The kettle is always on and we will even pull out the posh
biscuits!
Don't forget to visit the links below to view back
dated deals and Warrington Property News.
Twitter, https://twitter.com/HHWarrington/
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