Where to invest?
MACRO
Generally - the more you go North (from South), cash flow ⬆, capital growth ⬇
Jamie York - "If you're looking for a good mix of cash flow and great capital growth, Leeds [is] going to be a great area." / "I focus on Leeds and West Yorkshire because I think they're going to get amazing capital growth" 12 Jan 2023
So look for good mix (cash flow, AND great capital appreciation (Liverpool, Nottingham, Leeds)
MICRO
City centres become less available - ⬆ city centre investment (e.g. institutions build-to-rent), ⬇ affordability & availability to everyday investors.
Leeds Leeds is a city
growing at a phenomenal rate, population rate 7x London in last 10yrs, 2.7m in Leeds region, large student population, retaining 39% of graduates, GDP £70b (top 5 in UK), SouthBank development (2nd largest in Europe) powerhouse
of Yorkshire and the North of England, UK HQs (Channel 4, KPMG, Burberry, Capita, NHS, First Direct, Asda) city employs 30,000 in banks & building societies - massive rental demand (not enough properties) CityRise Top-Investment-Hotspots-Guide
WSW of city being transformed - traditionally downwind of factories & smelly rivers, housed the workers in terraces. No cheap to buy, high cashflow - before institutional investors move in!
Define your outcome - what are you looking for, cashflow, capital appreciation opportunity?
Define where NOT to look - reduce decision fatigue, cancel out areas you're not interested in.
Areas with historically no capital growth (e.g. some areas of NE always been £40k because nobody wants to live there - £50k min mortgage, so only cash), probably little future growth.
Areas with high LHA rates - generally areas with least desirable tenants - use StreetCheck, look at People tab (social grade - look for high C1 - people advancing / developing) and Employment tab (low unemployment, high employment)
Check demand
Check rental demand - using Rightmove follow these steps:
Check number already let - in Filters select 'Include Let Agreed' e.g. 454 - so 30/454 (approx 7%) is Let Agreed already.
This shows only 7% of properties are let - this is low
Check sales demand - using Rightmove follow these steps:
Check (rough) number of sales - input postcode (e.g. LS4) to view number of rentals in top left corner (e.g. 32 results)
Check number SOLD STC - in Filters select 'Include Let Agreed' e.g. 78 - so 46 out of the 78 (78 - 32) are SOLD STC.
This shows 59% of properties are SOLD STC
Shows demand for people buying in the area / active market (easy to sell if needed)
Call demand with local agents - letting and sales for rental and sales demand (may say properties are going for more than advertised - so loads of demand).
Speak to local landlords - what are they seeing?
Check (rough) number of rentals - input postcode (e.g. LS4) to view number of rentals in top left corner (e.g. 424 results)
Check infrastructure
Jamie York looks for infrastructure in this order: 1. Motorways, 2. Hospitals, 3. Universities, 4. Train links, 5. What's going on there - major companies are based there?
Using Google Maps look at the services available locally - how far to city centre, shopping centres, hospitals, unis, motorways & A-roads, etc
Check local Development Plans - Google [city name] development plans
Get an overview / idea of the local council's plans for what they want to achieve in the area. What developments are planned?
See which areas are lacking now and need help - areas for growth!!
More money they are investing, the better it's going to be - and opportunity for growth.
Any big changes - big companies moving there shows - more jobs, improving infrastructure, increased buyer & rental demand, etc - pressure on supply pushes up prices in surrounding towns/areas.