If you've been following the blog, you'll know that I have been doing a series of videos, which you can view right here on the site on Belfast Property TV, plus you'll also find them on YouTube.
I like to get out and about and see new properties on the market so I can size up the best opportunities and bring them to you as soon as possible.
Recently, my travels took me to Woodvale Street, in the North/West of Belfast. My 'property of the day' was number 34.
It's a 3-bed property spread out over three storeys, on the market for offers over £59,950. As I said in the video, this represents a solid buy-to-let in a part of Belfast that does tend to be overlooked by investors.
I will be taking a closer look at some North Belfast areas in upcoming Area Profiles, but for now, I want to talk about the investment potential in this area, and give a little insight into the numbers and how they stack up, with the aid of a little case study.
I had a pair of investors approach me looking for a sub-50k investment having watched this video above. They were interested in buy-to-let investments in the North and the West of the city, and keen if possible to find sub-50k properties.
They looked at a property on Rathlin Street - a 2-bed terrace just off the Woodvale Road - that was on the market for the incredible price of £49,950.
The market is very tight; there are fewer and fewer properties under the £50,000 mark that you can get this kind of yield from, usually renting for around £450 - a whopping 10% yield. They are being snapped up as the obvious bargains and little workhorses that they are.
In the end, they opted for 34 Woodvale Street, a bigger house and a bigger price tag - but they managed to negotiate it to just below £58,000. At a £500 rental rate they'll still make nearly 9% on this one.
But let's look at it another way...
Let's say they had to put down the standard 25% deposit for a buy-to-let mortgage: £14,500.
That upfront cash investment is now making them £500 per month.
As a rule of thumb, take a quarter off that for costs and you're left with the net yield. So, a net yield of £375 on a cash outlay of £14,500 - AKA a 31% annual yield.
Compare that return to what you would make if you popped that £14.5k into a savings account - the highest interest you can currently get is 2.5% for a fixed-rate, five-year term savings account with Tesco Bank. Rather than making you £375 per month, £14,500 in this savings account (locked away for 5 years!) would earn you £30.20 a month. Big difference!
On top of the immediate cash return, you also benefit from having an asset that you've bought at a good price, in a steadily rising market.
No brainer or what?
If you want to crunch the numbers on a potential property investment, I'm only too happy to nerd out on this stuff with you! Drop me a line to firstname.lastname@example.org or join the conversation on my social channels - click the links in the top right hand corner of this screen.