A couple of local landlords and I were having a discussion about the property market in Penicuik the other day, when the subject of risk against returns arose.
All landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other landlords are interested in high returns, with a greater risk with regards to the quality of the tenant. Before you start playing, it is a good idea to have a game plan.
For a low risk investment, you could buy property in the areas of Penicuik which are perceived as being more desirable, such as Mauricewood and Valleyfield, where you may be able to achieve an annual yield of around 4-6%. If you don’t mind a slightly higher risk of void periods or a more varied quality of tenant, you are likely to be rewarded with a higher annual yield of 6-7%. This level of risk can be typically taken with Cornbank and Kirkhill. If you are after annual yields of 8% and over, you could take more of a risk with houses in the poorer areas of town which may attract tenants of a low quality.
Email me on firstname.lastname@example.org or call on 01968 674601. If you are in the area, feel free to pop into the office – we are at 6 Bank Street, Penicuik, EH26 9BG. There is plenty of free parking and the kettle is always on.