Randolph Street out performs Errwod Road by 42% in South Manchester
Last week, a landlord of mine came into the office to discuss potentially investing in another Buy To Let property in either Levenshulme or Burnage. They were in the area meeting friends and they decided to take me up on my offer of popping in for a chat. I really do enjoy it when people take me up on this offer.
The landlord has seen a couple of properties that he really liked but couldn’t decide on which one to proceed with and as there is a lot to consider before investing in property he decided to ask my advice before making the final decision.
One of the most important considerations you will make before investing is the balance between annual return/yield and the annual value increase/capital growth.
Errwood Road in burnage is very popular with families as the three bedroom properties offer good sized living accommodation and gardens. The average three bedroom semi-detached property sells at around £179,000 and rents at £750 per calendar month
With this in mind, it was a surprise to find that two bedroom terrace houses on Rabdolph Street, in Levenshulme, have outperformed those on Errwood Road. This is because a two bedroom terraced property on Rabdolph Street in the centre of Levenshume can be bought for around £87,500 and the achievable rents can be around £525 per calendar
The yield which could be achieved from a property on Randolph Street is around 7.2% per year. When we compare this to the possible 5.0% on Errwood Road, it is 42% higher on Rabdolph Street. However, we must remember that yield is not the sole consideration when investing in Buy to Let properties. The average value of a two bedroom terraced house on Randolph Street in 2005 was £65,750 which has since risen by 33% in the last 10 years. A three bedroom semi-detached house on Errwood Road in 2005 was £95,000, meaning the value has increased by an impressive 88% in the same 10 years.