Saturday, 21 March 2015

Cliftonville property market outperforms the Kingsgate property market by 138%




Following a discussion with a local landlord who lives in the Cliff Promenade area of Broadstairs, we got chatting about his two buy to let properties in Margate and Broadstairs. His Margate property is one of those one bed apartments in the Cliftonville area and the other is in Kingsgate. We got talking about the two properties in both areas and he wanted some advice on where to buy the next one. Whilst giving that advice, just for interest, I did a comparison between the two areas (Cliftonville and Kingsgate) and was surprised to find that the property market in the Cliftonville Estate area had outperformed the Kingsgate development market by 138%!
The average price of one bed apartment in the Cliftonville area is £61,700. When you consider the rents that are achieved in the Cliftonville area are on average (for a one bed apartment) £526 pcm, this gives us a yield of 10.62% per year. So is the Cliftonville area the best investment? Well, in the Kingsgate area, where the the average value of property is £347,600 (although they can reach £500 to £600k) and the average rent for property in Kingsgate is £1,239 pcm, giving a much lower yield of 4.27% per year. This makes the yield/ return in the Cliftonville area 138% proportionality more than property in the Kingsgate area, so surely it is the best investment, isn’t it?
However, this is a great example of annual yield/return not being the only factor when choosing an investment property, as you should also consider how much the value of the property goes up in the long term. In the last 12 years, property values have risen on average by 50.2% in the Cliftonville area which is impressive considering there was the 2008 property crash. However, average property values for property in the Kingsgate area have risen on average by 142.9% in the same time frame!

So, if you are investing in Margate, Ramsgate or Broadstairs, do you want capital value or yield or a bit of both?  If you would like some advice about buying to let, be you a landlord with a portfolio or someone thinking of investing in the rental market, please call me on 01843 610 611 or email me at a.munns@redstones.co.uk.

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