So, maybe you are an experienced landlord with a healthy portfolio of buy-to-let properties, or maybe you are considering your first project. Either way, this blog will help you maximise the return on your investment.
About the Author
Matthew Jones is the Managing Director of The Purple Property Shop a leading Bolton Estate Agent, and is also a qualified accountant. Matthew has performed approximately six thousand property valuations and has his own portfolio of investment properties.
Maximising the Yield
You will hear many landlords talk about yield. So what is yield? In simple terms, it is the return on investment expressed as a percentage of the sum invested.
It is calculated by dividing the annual rental income by the property purchase price and multiplying by one hundred. The higher the percentage the greater the yield, the greater the return.
The trick to maximise the yield is to find a property (or a portfolio of properties) that gives you the highest rent for the minimum investment.
A general rule of thumb is that the smaller / cheaper the house the better the return.
Why Bolton?
Bolton is a great place to invest in property as it has a large proportion of affordable houses and a large stock of terraced properties. In addition, the presence of a university means the rental market is really strong.
There is also an excellent transport system in place with numerous bus routes and train services in place, along with easy access to the motorway network. This makes travelling to areas such as Manchester etc easy and as an increasing number of people are wanting to live outside of large cities, commuting is now a much more common practice.
The average house price in Bolton is currently £213,000 which is almost forty percent lower than the average house price in the UK at £345,000.
Furthermore, 35% of the housing stock is valued at less than £150,000 and 56% is valued below £200,000.
The average rent in Bolton is approximately £800 per month, this is typically for a property valued at approximately £120,000.
Expected Return
Using the metrics above, if you were to purchase a property in Bolton for £120,000 and then rent it out at £800 per month (£9,600 per year) then this would generate a yield of 8% which is absolutely spot on in terms of what a landlord would want to achieve.
If you think that bank savings rates are currently between 4% and 5% then investing in property in Bolton will generate a return that is almost twice as lucrative as leaving your money in a savings bank account.
Managing your property
Using a credible Bolton-based Estate Agent to manage your portfolio ensures that your investment is protected.
Managing a Bolton rental property is complex, but we manage hundreds of properties, and at the time of writing this blog, we don’t have a single tenant in rent arrears.
Our lettings department works hard to ensure tenants are happy but also that you as the landlord get a good return on your investment. We inspect properties on a regular basis to ensure they are being well looked after, as maintenance issues can easily escalate and become serious, impacting on the costs you may have to pay to rectify them.
We achieve exceptional results by ensuring we get you the very best tenants for your Bolton rental property. Every tenant in our properties is thoroughly vetted and checked before they sign the tenancy.
It is important that we know as much information as possible about the tenants and so we undertake not only Right to Rent checks and details such as how many people are moving into the property, but also landlord references, proof of income and any history of CCJ etc. We want to make sure that the process of finding new tenants is smooth and that we identify any issues as soon as possible.
Here at the Purple Property Shop we have managed thousands of properties over the last fifteen years and are experts in our field. We not only manage properties in the immediate Bolton area but also the surrounding areas such as Bury and Rawtenstall.
When choosing a letting agent for your Bolton properties, be sure to make sure you are choosing an agent that is accredited with either the NAEA or ARLA as these organisations ensure that their member agents conform to very high professional standards.
If you would like further information about how we can help you as a landlord in Bolton, give us a call on 01204 598979 or email Sally (director of sales and lettings) at sally@purplepropertyshop.com
You can check out our listings and houses for rent in Bolton here.
