A landlord came into our office looking to purchase a new buy-to-let property. She had seen two properties of interest, one in Grecian Way, Broadfields and the other in Collins Road, Pennsylvania so wanted my advice on which would be best.
Collins Road offers a wide variety of properties, from
bungalows and two bed terraced houses to large detached houses, so it appeals
to a wide audience. Due to the
popularity of the road, it has an average rent of £1061pcm, which is slightly
higher than the Exeter average, however when looking at the average property
value, it is around 7.3% lower than the whole of Exeter combined, possibly due
to the high number of rental accommodation units in the area. A lower property value and higher rent means
only one thing, a higher gross yield – averaging around 5.3%, which is around
13.2% higher than the whole of Exeter combined.
Grecian Way in Broadfields is a very popular residential
area. Generally people tend to buy property
in the area to live in rather than rent out so this keeps the values higher
than the Exeter average, however interestingly though, the average rent paid is
considerably lower – around 17.1% lower in fact. So we now have the opposite position to
Collins Road, a higher price and a lower rent, therefore giving an average
gross yield of only 3.56%.
Moving on to compare the two roads directly, the gross yield
for Collins Road works out at around an incredible 49.7% higher than Grecian
Way, however the properties values are around 15.44% lower.
This clearly shows that the question of yield over
capital growth is the first one to overcome.
The higher property values in Grecian Way mean that in general the
capital growth will be greater, depending on market conditions, however if you
are looking for a good yield, Collins Road is the place to be.
If you are looking to buy a property in Exeter, please
come and see us or call me on 01392 254488.
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