Should I invest in a 1 bedroom flat in Bournemouth?

I was talking to one of my landlords on Friday last week about his recent purchase of 3, 1 bedroom flats in central Bournemouth. We were discussing the number of investment opportunities around the town centre, which has a massive rental demand, but people were missing them because they were unsure about whether such flats would make a good investment.

I thought I would share with you a few of the things we discussed, and some of the facts around investing in 1 bedroom properties in Bournemouth. In particular, how a new development investment could work for you.

There are over 7,100 flats in Bournemouth (BH1). This represents a massive 76.3% of the housing stock here, with the national average being nearer 17.5%. The average price of flats with one or two bedrooms in Bournemouth is around £212,378, which is nearly 6.1% higher than 12 months ago.

You can buy a one bedroom flat on the cotton exchange development down Old Christchurch Road, for a very reasonable £130,000. If a landlord put down a £32,500 deposit and borrowed the rest, they could achieve around £800 per month in rent. Even after paying the service charge, yields could reach around 6.5% per year. However, you must remember that every landlord’s tax and interest rates are different, so it is essential to research your investment carefully before committing.

Finally, let’s not forget about the potential increase in capital value of the property. To do this, I took a look back at some older developments to see what happened to the value of the new apartments. I was looking at the one bedroom flats in the Jacey House development and found that they had sold for around £60,000 in 1999 when they were built. This had over doubled in value over 7 years, to nearly £130,000 in 2006. The values have now maintained around that price and has recently sold last year again for £135,000. What this shows you is brand new apartments can not only hold their value, but can also grow considerably in value. This makes it a strong investment; contrary to any belief new apartments lose value.

So do 1 bedroom flats make a good investment? They absolutely do, so long as you go back to the basics of buying the right property at the right price. If you are looking at investing in a new development flat, do remember that not all developments are a good buy as some can be grossly overvalued, or could be in the wrong location. My advice would be to speak to a local expert who knows the area well and what can be achieved. If you would like to find out where the next great deals are, keep an eye on my blog as I update you with my best picks.

I hope you enjoyed this article, and if you would like to find out more information about the local Bournemouth property market then please take a look around the blog. If you are looking to invest in property in Bournemouth, or are just interested in the local property market, then please get in touch with any questions you have. You can either give me a call; 07979123970 or drop me an email to luke.marchbanks@belvoir.co.uk or even come see me at my office for a coffee.