In Coventry, many Investors and Landlords seek flats over houses because they tend to give a higher profit yield. The rise of living costs also means that the demand for renting options is rising. However, with legislation getting tighter within the lettings industry, Darams considers; are flats still a good option for your portfolio?
Getting a Return on your Flat
Typically, you will find that the purchase price of a flat is lower than a house, but a flat is a very different investment. You can save money in maintenance costs, as in most cases, the freeholder or management company will be responsible for the upkeep of communal areas. You might find, however, that lenders are less willing to finance flats, due to higher risk.
Consider Market and Location
See if you are in an area where there is a demand from single people, young professionals, or even young couples who are looking to start out with a small, affordable property. This is who you need to focus on when you’re looking for a tenant for a flat.
Include less obvious Costs
Keep in mind that there is the added concern of having to clean up and redecorate more frequently, when you want to attract new tenants. Unlike houses, you also have less freedom to make significant alterations to a flat. Therefore, it might prove difficult if you are looking to increase the value for sale.
House or Flat?
Whilst the market for a flat might be smaller and less long-term, having them as part of a portfolio, along with more family-friendly houses, can pay off in the long term. However, whether you invest in a house or a flat really is down to your circumstances, location and investment goals.
For guidance on seeking your next property, call Darams today on 02476 691691
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