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Monday, February 17, 2014

Investment cupboards in the sky

I've recently written about a friend who is looking to invest in an apartment in Nottingham.

I was there at the beginning back in 2007, when single level city pads were called flats not apartments.  I watched as the waves of new and converted blocks transformed the urban landscape, propelled ever onward by cheap money from the banks and waves of eager investors first from Ireland, then from the rest of the UK and the Far East.

The legacy

What we now have, is the equivalent of cupboards or rabbit hutches in the sky.  As far from the Utopian dream of Le Corbusiers city in the sky and the Manhattan bohemian life of acres of loft living as it is possible to get.  The reality is that these are nothing more than boxes in the sky.  Most have small rooms and smaller bedrooms.  Fine, for renting out to footloose professionals who crave a little urban excitement before settling down to rear a brood in dependable suburbia with detached properties, gardens and even their own garage.  Not so great if you are looking to buy a livable and exciting alternative to a 3 bedroom semi.

The investment fallback

The reality for all investors is that unless your city centre investment (outside London) has some kind of curb appeal.  A mezzanine floor, Georgian windows or historic features and ambience perhaps, you will be selling your investment to an investor as part of your exit strategy.  This means that they will be looking at yields, return on capital and the competition.  Therefore, if you are looking at a city centre apartment investment.  Remember to look for something that will not only let well, but will also give it the edge and make it appeal to owner occupiers as well as landlords as part of your investment strategy.

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