Investing in Walsall buy to let property is a little different to investing in the stock market and arguably more rewarding than the latter. Or you could of course pledge your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are, in my opinion, miserably low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). The Stock Market can give good returns, but unless you are a city whizz kid or on the phone every day to your Stockbroker it is difficult to make positive returns. The masses usually invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.
However, with buy to let, things can be more hands on. One of the things many landlords like is the physical nature of property – the fact that you can touch the bricks and mortar. It is exactly this which attracts many of Walsall’s landlords – they feel they are making their own decisions rather than assigning them to city whizz kids in Canary Wharf playing Russian roulette with their savings.
I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. The increasing of value over time, is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Walsall, but as with shares, the value of property does go up as well as down however, the initial purchase price rarely decreases. Rental income is what the tenant pays you – hopefully this will also grow over time.
When you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. Over the last 5 years, an average Walsall property has risen by £28,906 (equivalent to £15.84 a day), taking it to a current average value of £152,067. Yields range from 6-8% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).
Nonetheless, something I haven’t spoken of before is the more specialist area of flipping property to make money (flipping – buying a property, carrying out some minor cosmetics and re-selling it quickly). I have seen several investors recently who have made decent returns from this strategy. For example…
One Walsall Investor paid £65,000 for a 3 bed detached on Stafford Street in October 2013. It appears a lot of cosmetic work was done to the property and it was resold a few months ago (December 2016) for £173,000 … 166.15% return before costs (or compound annual return equivalent of 36.21% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=61340318&sale=89449845&country=england
Another Walsall Investor flipped a lovely 3 bed detached on Chesterfield Road, paying £200,000 in December 2012 and selling it after some extensive work. The property was sold for £365,000 a few months ago (November 2016) … 82.5% return before costs (or equivalent of 16.5% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=42472338&sale=4713769&country=england
These examples reveal how the Walsall property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Walsall landlords and investors to become particularly wealthy.
As my article mentioned a few weeks ago, more and more Walsall people may be giving up on owning their own homes and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength.
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