BTL South Norwood?

by Readers Question

13:15 PM, 15th March 2015
About 4 years ago

BTL South Norwood?

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BTL South Norwood?

Currently I am looking for a BTL property in South East London, budget is between 300¬350k. First I started to look at Peckham, New Cross area, Deptford (Zone2), which is my budget only allow 2-3 bed ex local flat. Yield would be high with this property.

Then I found if I purchased one in South Norwood (Selhurst – Thornton Heath) (Zone4), I could get freehold house instead within my budget. Relatively low yield would be fine.

My questions are:

1. Is South Norwood attractive to renters?

2. Could you tell me which part of South Norwood area you would recommend to buy-to-let?

3. I know many professionals and students would prefer to live in zone2, Peckham or New Cross would be easy to find tenants. But I am bit worried a property in zone4 means my target tenant would be only families? In other words, is there any professional and students or are any landlords have experience renting to this kind of tenant in the South Norwood area, zone4?

Many thanks in advance for any feedback!!

Kimsouth norwood



Comments

Neil Patterson

9:05 AM, 16th March 2015
About 4 years ago

Hi Kim,

We have developed a property research tool specifically to help readers with this type of demographics question.

Please see >> http://www.property118.com/property-reseach-tool/

We also have a guide to becoming a respected and profitable landlord that contains a great deal of advice >> http://www.property118.com/how-to-become-a-respected-profitable-landlord/60765/

We would also recommend that you always do research with the local on the spot letting agents gauge demand in different areas.

Mark Alexander

12:21 PM, 16th March 2015
About 4 years ago

Hi Kim

You haven't said why you are considering a 4 bed house with a lower rental demand and hence gross yield potential. There could be several reasons, e.g. higher capital growth expectations or equal net rent after factoring in ground rent and service charges. Can you be a bit more specific please?

Also, you haven't said whether you are hoping to buy with cash or with the benefit of mortgage finance to leverage your returns. Again, if you could provide clarification it may assist the discussion and provide an opportunity for people to raise more points for you to consider.
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andy peers

15:55 PM, 16th March 2015
About 4 years ago

S Norwood would be higher yield if you HMO'd it up. you can also extend for extra rooms.

Norwood is one of those areas that historically has been cheaper than others around but now has had much regeneration as well as increase in value. I'm not sure how yields would compare ex la flat zone 2-3 vs house in S.Norwood. you're getting tenants in both circumstances that are looking for cheap rent vs other locations/properties. I'm sure they'd be sufficient demand in either location as London outskirts are still a high demand area.

regards Andrew.

ps highest yield would be ex council flat/house in S.Norwood.

Adam Davies

21:33 PM, 17th March 2015
About 4 years ago

Thornton Heath resident here!

I own a 3 bed BTL house in Thornton Heath and it delivers a very good yield.

Sure it is not as desirable as Zone 2, however, with direct trains to Victoria and London Bridge, it is very convenient. Thornton Heath and South Norwood train platforms are very busy during rush hour, which is a good indication of how many London professionals commute from these areas.

So to answer your question, yes I would say they are attractive to renters, as long as you can buy within walking distance to either of the stations.

Also, these areas are sandwiched between Croydon and Streatham, where it is now very difficult to get a good 3 bed in those areas for under £350k, so Thornton Heath or South Norwood have some good bargains for now, but these prices are rising so don’t miss out!

Mandy Thomson

8:40 AM, 18th March 2015
About 4 years ago

I've been following this discussion with interest, as I know the area VERY well, though I haven't commented yet because I let 1 bed flats, not HMOs, and you're asking for very specific advice.

Coincidentally, I also have a friend who co-inherited a large Victorian house in Selhurst when his parents died 18 months ago. Although his brother is an experienced property investor and landlord, and they're both quite handy, they didn't have the appetite to convert the property and let it out (either as flats or an HMO) so they therefore tried to sell it. It sat there for nearly a year (perhaps it was priced too highly to appeal to developers) - they've just recently managed to let it, although he won't say in what capacity (he doesn't want me "nagging" him!).

Although the house is in good condition, after having elderly people living there, it's not well enough presented and high spec enough to appeal to a single household, and even if it was, although families DO buy those houses, it's not an area that typically appeals to that demographic who also want a desirable area. Another factor to take into account is that the area is in a flood plain and my friend's parents always had problems when it rained heavily.

According to Spareroom, rooms in SE25 let for between £500 - £600 pcm, which is just slightly less than Croydon, but even the fashionable SE19 area isn't as sought after (for rooms) as Zone 2 areas. There are some HMOs around Selhurst, but I'm not sure they would appeal to professionals.

Having said that, the area around Selhurst station is very pleasant, and small flats certainly let very well. I have 1 bed flats not far from there, in much less desirable parts of Croydon and I've got great tenants - young professional couples. The longest they've been with me is over 4 years, and I've never had rent even one day late or any other trouble (other than being politely told about maintenance issues which unfortunately, I've had plenty of...).

To conclude, my advice is if you buy the house, beware of the flooding issue, and convert it into smaller flats rather than HMO.

Judith Wordsworth

19:29 PM, 18th March 2015
About 4 years ago

Croydon Council voted in to introduce borough wide Landlord Licensing but the decision is being referred to the Scrutiny & Strategic Overview Committee‏ next week. There are a group of Croydon Landlords who are also fighting this decision. If you can PM me I can add you to our emailing

Mark Alexander

19:58 PM, 18th March 2015
About 4 years ago

Reply to the comment left by "Judith Wordsworth" at "18/03/2015 - 19:29":

We don't have a Private Messaging facility and we don't allow contact details to be posted in comments. Is there a website or Facebook Group where people can sign up? If so please post a link.
.


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