Breaking Down The Forest H...

I had a conversation with a landlord over Christmas who lives in Westwood Park, who took me up on the offer of an informal chat about the Forest Hill property market the other week after he read the 'Forest Hill Property Blog'. We got talking about investing in Forest Hill property and how different areas of the area performed against others. Investing in Forest Hill property is a balancing act between capital growth and yield. On the one hand, going for strong capital growth seems an obvious choice because of the potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties tend to be low meaning if you are taking a high percentage mortgage, the rent doesn't pay the mortgage payments.It became really interesting when we compared his area of Westwood Park against The Dacres Estate, where he owns one of his buy to let properties. The average value of properties on Westwood Park is £624,200 and an average rent for property there is £1,919 per month. This would give our landlord a yield of 3.68% per year, very reasonable indeed. Until you consider those ex-local authority one bedroom flats on the Dacres Estate,which sell for around £110,500 and let, depending upon condition for around £950 per month, a yield of 10.3% per year, which is a 179% proportionally higher yield.However, like I said a few weeks ago, yields are not everything in property investment. Another is how the value of the property goes up over time. Better properties in better locations don't have the best yields, but their property values tend to increase much faster over the long term. The average value of a one bedroom flat on the Dacres Estate in 2000 was £54,000 in 2000, a rise of 104.6% to today. However, average values on Westwood Park have risen by 243% since 2000, an impressive £443,200 gain. Now I know that there aren't many landlords out there who would buy a large four bedroom semi to rent out, but it's taking an in depth look at the market that allows us to give you the very best advice and opinion to help you find the best investment property. If you would like any advice on choosing an investment property, please feel free to call on 020 8699 5139 or send us an email to ben@benjamin-matthews.co.uk The Dacres Estate property market outperforms the Westwood Park property market by 179%