Stafford Street or Goodman Street – which is best?

I was talking to a couple last week who are considering becoming landlords for the first time and they were looking for advice as to whether a terraced property in the Eton Road area of Burton would be a good buy. I suggested they look South of the Eton Road Park on say, Stafford Street or Goodman Street. They were then interested in which would be the better investment and whilst properties on both streets can let and sell well, I wanted to do a little more research to help them with their decision.

Their budget only allowed me to look at in the £70,000 to £75,000 region, so looking at just 2 bed terraced houses in both streets, the average value on Stafford Street is £72,700, while 2 bed terraced houses on Goodman Street are around £70,100. To better understand the investment opportunities available, we need to consider the rents being achieved for 2 beds terraced on both streets. Looking at the last two years, the rents are almost identical to the pound at around £435 per month. However, to judge a rental investment, you must consider the capital growth as well as the yield.
In 1995, the average value of a terraced house in the Stafford Street was £28,700 and on the Goodman Street, £23,800. This shows that the average Stafford Street terraced house has risen by 152% since 2002 and an annual current yield of 7.1% a year whilst on Goodman Street, prices have risen by 194% and a yield of 7.4% a year.

Ultimately, Goodman Street property values have risen quicker to almost match Stafford’s in the last 19 years. I doubt very much that it will experience similar growth, over and above that of Stafford Street in the next 19 years. We would not have identified these difference in returns or the increase in values, without the extra investigation. In this case, it depends on the best available property to buy on the day.

Finally, one thing that struck me was the wide range of rents achieved on both streets. I would expect a 5% to 7% range of rents on a street for the same type of house. On both streets though, the gap is nearer 15%, as the average wood chipped walls terraced let for nearer £400 but a month, but the pretty ones, nicely decorated (and you don’t need to spend too much money to do that), can let for as high as £460 per month.

If you are a landlord, new or old, feel free to pop through the door of our offices on the High Street, call me on 07973 666229 or send me an email to burton@professionalproperties.co.uk .

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