Landlords what not to buy in Southampton

On this blog I tend to suggest good properties and good areas to invest in. A key element of a successful buy 2 let is to ensure the entry price is right - it's not your family home and there is no emotion involved, it's about making sure the property is right and the numbers work and make sense!

I came across this property which has just come on the market today at £215k. It’s a 2 bed leasehold unit of above average size on a great road in Southampton, however it’s a very old block with no ensuite. Your tenant pool will include under and post grad students, workers, young professionals and benefit recipients. Rental levels in the block are pretty well established at £825pcm, you might push it to £850pcm - but that is the max, even for a well presented unit like this one! Based on the asking price of £215k and a rental income of £825pcm your gross yield is 4.6% which is too low for this location in the Southampton market. As an investment it makes sense at the £175k to £180k mark tops!!

Six months ago a 2 bed sold in that same scheme for £156k and in October 2013 two x 2 bed units sold for £140k and £146.5k respectively. This unit is £35k overvalued.

There is good value in the Southampton market but you need to know what to look for and how to assess it properly. If I can be of assistance please drop me a line.