Have a look at these two pictures:
Both these flats are the same size but with very different price tags!
The property on the left is for sale at £19,950 and the property on the right is for sale for £995,000.
In effect the property on the right is 50 times more expensive than the property on the left.
So guess how much more rent you can get for the more expensive property compared to the cheaper one:
50 times more? Nope
40 times more? Nowhere near!
20 times? Not even close
10 times? No
5 times? Close
The expensive property can rent for 3.33 times more than the property than the left. Crazy isn’t it? Well yes but it does not surprise me at all. I discovered this very early on in my investing career.
There is no relation to property price and rental values. Different areas yield at different amounts. Some areas yield high others yield very low.
The idea is to invest in high yielding areas and avoid the low yielding ones UNLESS you are extremely wealthy and can afford to speculate on desired areas.
So if you are at the bottom and want to make it big please invest in high yielding areas no matter where they are. It is these high yielding areas that make a barrow boy like myself and maybe you RICH!
By the way the property on the left is in Hull and the property on the right is in London SW3 and they are both studio flats.
If you want to invest in high yielding areas you know what to do - CONTACT US!
Posted on: 23rd Apr 2010