A couple of local landlords and I had a discussion about the property market in and around Teddington, when the subject of risk against returns arose.
All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.
For a low risk investment, you could buy property in the areas of Teddington, Hampton, Richmond etc which are perceived as being more desirable, where you may be able to achieve an annual yield of around 3-5%. Following an article a few weeks ago, if you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 6-7%. This level of risk can be typically taken with properties either in Isleworth, Feltham, Hanworth etc. If you are after annual yields of 7-8% and over, you could take more of a risk with houses of multiple occupancy in the popular student areas, however you have more of a risk of wear and tear and potential damage on the property. The choice, as they say, is yours!
If you would like any advice on choosing properties, do drop me an email to rebecca@rebeccasmithpropertyservices.co.uk. I'm more than happy to offer my opinion.
Rebecca Smith
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