General (main property discussion here) - North East Hotspots

Hello I am a new to BTL and looking to buy property in the North East of England. Can anyone please advise me of the areas where letting would be no problem or areas to avoid.

Thank you

Hi Gary

I think it depends on what you mean by hotspots.

It's always impossible (in my experience) to rely on what someone else thinks when it comes to capital appreciation. I have bought in the NE (Co Durham mostly) largely because of the income. I could leverage at quite high levels and the yields were sufficien to cover the mortgage payments and some.

Without taking too many risks, I'd always put forward this strategy (by risks I mean buying high theoretical yields when high voids are also likely). Capital appreciation has been kind to me in parts, but it also means my money isn't working so hard as my yields have fallen!

Where are you from Gary? I'd definately recommend heading up there and chatting to some letting agents and seeing the areas for yourself.

cheers

John

Thanks for your reply John. I live in the north east so have a pretty good knowledge of the area, although not so much when it comes to knowing about good rental areas. Like yourself, I have been looking in the villages of County Durham.Is there any areas which really stand out as good opportunities for rental? Thanks

hi where you from gary? where have you been buying john? i'm from bishop auckland,Co. durham,theres always been good letting potential round here,trouble is costs over 100k for a decent terrace now,even the scummy surrrounding villages are 65+

gary,

the north east has seen a lot of investor action of recent years and consequently yields have fallen dramatically. thats not to say its a bad place to invest.

i believe that any investors really needs a minimum of say 4-5 properties to smooth over the bumps of voids, arrears, maintenance etc.

in this respect the north-east is great as you typically require less capital to obtain this level of diversification than in london for example.

other regions you could look are north-west, wales and parts of the midlands.

tom

Thanks for that Tom. How do landlords manage properties which are out of their region and difficult to get to and to maintain etc? Do they use agents? If so what is the going rate and is it worthwhile?

Gary

Hi Gary,

I work abroad so I cannot get to see my properties at all. I employ the services of letting agents. They can deal with all the problems that may occur.

Typical rate is 10% + VAT, but I am paying 12.5% +VAT on one of them.

It all depends how much you value your own time, whether it is worth paying an agent. If you live close by and you dont mind changing bulbs and daft things like that, then great, you will save money, but as I live and work away, its not an option for me.

regards

Simon