Should you buy a cheap house up north as a buy to let property investor. Find out whether cheap houses up north are worth investing in when as I go over the pros and cons and the biggest risks as a property investor.
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As a property investor buying up North is tempting as property prices are more affordable, which means you can get a buy to let property with a lower deposit amount. Rents can be good too, which means you can get a good return on your money invested.
Looking at like for like property, property prices are cheaper up north when compared to the south of England and this is essentially down to supply and demand.
There’s nearly a 4 times price difference between London and Liverpool which means you could buy 4 properties in Liverpool to 1 in London.
Key reasons why the North is cheaper:
- There’s less population up north means less demand for housing.
- More jobs in the south means the younger population move from the north to the south to find suitable work. This increase in population, translates in increased demand for houses and therefore increases in property prices.
- Less demand for housing in the north has meant property prices have not appreciated as high as those in the south.
Pros
- Good return (yield) with potential for some capital growth, last 12 month been good (pic 5) for some regions.
- Lower purchase price point means:
- Lower amount of deposit required
- Lower amount of stamp duty to pay
- Average rents in northern regions have increased in last 12 months
- Can afford to buy multiple BTL properties 3 or 4 instead of 1 or 2 in south.
Cons
- Maintenance and Repair costs are the same, so if your boiler breaks down it will wipe out more of your available cash as the cash amount you generate up north is less.
- Tenant demand is less historically as less jobs available. Potential to lead to longer vacancies.
- Tenant quality on potentially lower income
- Likely need a property manager -eat into profits
- Cheap houses may mean they are in higher crime areas.
- More aggravation - More houses leads to more tenants, leads to more problems.
#propertyinvesting #buytolet #cashflowinvesting
1 июл 2024
