Ramsgate Property market - Good Yields?

Following last week's discussion about how property values (aka Capital growth) had gone up in Ramsgate, this week I want to discuss the other side of property investment, the yield.  If you recall, the yield is the yearly rent from a property reflected as a percentage of the value of the property.

So what sort of yields can be achieved in Ramsgate? Starting at the lower end of the market, Two Bedroom Apartments, depending on accommodation, have an average price of £145,539, whilst the average rent achieved is £616 per month, giving an average yield of 5.1%. Considering properties like this in Ramsgate have risen in value by around 2.2% this year, that's an overall return of 7.3% in the last 12 months.

A modern 3 bed town house can be bought for around £185,000 in Meridian Close and they achieve rents around £850 to £900 per month. This gives a yield of 5.5% - 5.85% and with property values increasing by nearly 2.2%, that gives us 7.7% - 8% return. Other factors must also be taken into account when buying a property to rent out. The more modern property will require less maintenance, and could sell quicker (because there will be a time when you do need to sell it) also the larger modern property will have slightly less void periods than a smaller property. Balancing capital growth and yield is vital, but they are not the only factors to consider when buying a property to invest in.

The reality is, buying a buy to let property, wherever it may be, is a vastly different affair to buying a property for yourself to live in. When you buy a home for yourself, you look for a property with the accommodation you need, in an area that you want to live in, within your budget. When buying a home, the only opinion that matters about its features, location or accommodation is your own. For a buy to let property, the equation is exactly the opposite. Buy to let investment is about finding a property in high demand and short supply that will go up in value substantially over time.

The only views that matter when assessing an investment property’s potential, features, location and accommodation are that of the market place, both now and in the future. It’s this balance of market opinion and underlying demand which ultimately determines its investment performance, both in terms of income and capital growth. I tell landlords never to allow their own personal likes and dislikes to cloud their rational investment judgement. Remember, rule No.1 of property investment. YOU aren't going to live there.

If you want to chat about property investment in the area, be it Ramsgate, Margate or anywhere in the Isle of Thanet, please pop in to my offices on Northdown Road in Cliftonville or give us a ring on 01843 293 293