renting in Poole and Bournemouth

Diary of a Letting Agent - Property Advice

Property Advice in Poole

A lovely couple came in to see me this week. They had inherited £250,000 and were toying with the idea of becoming first time landlords.

The couple were in their early 50’s, still working, had paid off their existing mortgage and were in a good place, however, their pensions were going to be state pensions, so they were looking to invest it now with it providing a better standard of living when they retire at 67!

They wanted to make their inheritance bring in the best possible return. Now, for those of us who have been in the industry for a long time, we get it, and nothing could be easier, however, when you meet someone who has never gone down this route before, the whole process can be frightening to them and where they may think they want the best possible return, they may opt for a lesser return if it brings them more peace of mind.

After finding out a few details, we went through the various options they had. From purchasing one or two properties outright, or purchasing a HMO (house of multiple occupancy), or splitting the money and purchasing more than one property with buy to let mortgages. We also discussed leasehold flats in blocks, the importance of checking the term remaining on the leases and how much the block management fees can be – versus – freehold houses, as well as the areas of the properties and looked at what kind of tenants would the properties attract, how much they wanted to be involved with the investment, i.e. the maintenance side of it and obviously the question what kind of rental yields they are likely to attract.

£250,000 – what can it buy you these days? We looked at various properties around Poole and Bournemouth with various agents as well as out sister company Landlord to Landlord Sales (which have tenants in situ already and would give a rental income from day one).

Studio flats ranging from: £75,000 purchase price | £410 per month | £4,920 rent per annum

1 bedroom flat in Bournemouth: £99,000 purchase price | £525 per month | £6,300 rent per annum

2 bedroom flat in Poole from: £125,000 purchase price | £725 per month | £8,700 rent per annum

3 bedroom houses from: £190,000 purchase price | £825 per month | £9,900 rent per annum

4 bedroom houses from: £230,000 purchase price | £925 / £1,100 per month | £11,100 / £13,200 rent per annum

4 bedroom converted to 5 HMO: £245,000 purchase price | £1,825 per month | £21,900 rent per annum

2 x 5 bed HMO with 50% mortgage: £490,000 purchase price | £3,650 per month | £43,800 rent per annum

The prices above are average conservative prices on middle end properties. There are more expensive properties in more attractive areas that would achieve higher prices.

Now, I am not a financial advisor and I would always recommend people talk to one as well as accountants regarding tax implications, but I have been in the property industry for some 30 years now and know our local market pretty well.

With the 4 bed house I have give two rental yields, the first £925 pcm is based on a working family, the second is based on a family on full housing benefit, whichever, is the investor’s preference.

You may think the last HMO’s would be the most attractive, however, to some it would be their worst nightmare. The two HMO’s with a 50% buy to let mortgage (which would be tact deductible) brings in far more revenue as well as gaining equity (in theory) in the property over the next 15 years or so. If properties were to double in this time, the investments would bring back £750,000 (after mortgages paid off) versus £500,000 on one.

A nice way to start your retirement off, wouldn’t you say? To sell one property, pay off the other property’s mortgage and not only have a healthy pension income but a lump sum to have fun with!

If you would like a friendly, no obligation chat regarding any property matter, then please email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or telephone: 01202 711169.

Don’t forget that Sharon now produces and presents a live weekly property show on Wednesday 12pm – 2pm on HopeFM.

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