‘Flipping’ Heck – Evesham property values rise by £26.66 a day

Investing in Evesham buy to let property is very different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, it is considered by many to be the safe option but the returns achieved are awfully low (a 2-year bond rate from Nationwide offers a whopping 0.75% a year!). Another investment is the stock market, which can give good returns, but unless you are prepared to be in touch with their stockbroker daily, you’ll probably choose to invest in funds, making the investment quite hands-off and giving the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things that many landlords like is the tangible nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Evesham’s landlords – they are making their own decisions, rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say that investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as ‘capital growth’. Capital growth, also known as capital appreciation, has been strong in recent times in Evesham and while the value of property does go up as well as down, just like shares do, the initial purchase price rarely decreases. Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Evesham property has risen (according to Zoopla) by £48,650 (equivalent to £26.66 a day), taking it to a current average value of £246,500. Yields range from 4% a year and can reach double digit percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t written about before is the more specialist area of flipping property to make money. (flipping – buying a property, carrying out some cosmetic changes and re-selling it quickly). I have watched several investors make decent returns from this strategy.

One Evesham investor paid £140,000 for a 3 bedroom terrace on Burford Road in April 2015. It appears some cosmetic work was done to the property and it was resold a few months ago (October 2016) for £177,000 … 26.43% return before costs (or compound annual return equivalent of 17.35% AER) Property Details

This demonstrates how the Evesham property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Evesham landlords and investors to become particularly wealthy.

As I mentioned a few weeks ago, more and more Evesham people may be giving up on owning their own home and are instead accepting long term renting. If you would like to know what (and what would not) make a decent buy to let property in Evesham, then please feel free to contact me at tom.tarver@johnsons-property.co.uk

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