Do semi-detached properties in Croydon make good investments for Buy-to-Let

After reading through my blogs over at www.CroydonPropertyNews.co.uk, a budding first time investor popped into the office, looking to jump onto the property ladder with a nice investment deal. He wanted to know more about the industry and what really ticks the boxes when buying investment properties. As he has lived in the Purley area for over 8 years and so naturally, knows the Purley area well, but lacked the in depth knowledge required to invest successfully in the Croydon area. He wanted to know if Semi-Detached properties in Croydon make good investments for Buy-to-Let, or whether he should stick to Purley.

Over a long coffee, I explained to him that whilst Purley is a prestigious place to live, for investing purposes, landlords can expect to achieve a yield of around 4%. Property prices are just so high in these luxurious parts of the CR postcode that it severely hinders the yield.

I also explained that the area he lives in (CR8 – Purley), has in fact had property value increase by 28% in the last 5 years! So Purley is by no doubt a great place to live and the Capital growth will out-performmost other CR postcode areas, year on year.

As we all know, there must be a good blend of Yield & Capital Growth when looking for a rental property. I added to this equation by explaining that the Right Type of Propertymust be considered too. I was able to suggest that the BEST type of investment, in terms of looking at a quick let time, strength of lasting tenants, appreciation (capital growth) and of course Yieldwould be found in the 1 and 2 bedroom flats in Croydon. Croydon is by far the best place to be investing right now if you are in the CR postcode as the news of Westfield’s, £1billion cash injection and the 150+ new developments in Croydon is really giving it a huge buzz. 21% of all properties in Croydon (total 145,010 properties in 2011) or 30,452 of 145,010are privately rented. That is in fact the highest number in the entire ‘Outer London’ area, the next closest being Barnet, so Croydon is doing something right!

Now I could waffle on with figures all day long (believe me I really could, I seem to enjoy it), but the bottom line that I finally came to (after our second coffee, and a bit of a buzz), that Yes, semi-detached properties in Purley are great investments, but the smaller 1 and 2 bed flats are slightly better. The downside maybe that their capital growth will not be as stable as those Semi-D’s in Purley. I have so much more knowledge to share and it is all found on the Blog: