Buying in a small town

Our Experts Answer:

Make sure you do figures off net yields rather than gross yields. I find many investors work off gross yields and in small towns these can look attractive until you actually take the rates, insurance etc into consideration. Often the net yields aren’t actually that great when considering the increased risk associated with potentially higher vacancy levels. Carefully assess the short, mid and long-term employment opportunities for the area. All fine to have a property showing great paper returns but you are unlikely to achieve them if the area is going backwards.