Watch: How important is price per square foot when buying an investment property?

A question we get frequently asked by our investors is how important is price per square foot when buying an investment property?

Our Sales Director, Elliot Vure, is on hand to answer that question for you.

Credible investors don’t consider price per square foot as a true metric of value. This is because price per square foot can vary massively depending on the location, quality and supply in the area. For example, if you’re working out price per square foot in an apartment in central Birmingham and are comparing it to a unit the same size in the apartment building next door, you won’t get an accurate representation. One building unit might be high-spec, brand new and have used the best materials and the other building unit might be outdated and in need of repair. Whilst the two buildings share the same postcode and unit sizes, there are many other factors that stop the price per square foot being a like for like comparison.

There are several questions investors must ask themselves before they begin the investment process. What does the investment cost? How much will the investment return? What will its capital appreciation be? One of the most important factors investors should be concerned with is its value.

The value of an investment is more accurately represented by the capital appreciation and yield that the property will generate, rather than assessing the price per square foot. There will always be cheaper properties based on the square foot that may have been vacant for months, don’t generate a good yield and have a poor resale value, so it’s always worth looking at the investment overall rather than just the price per square foot.

For investors interested in buy-to-let opportunities in the UK, we have a number of properties available for investment in the UK’s no.1 investment location, Manchester. If you would like further information on any of our investment opportunities, please don’t hesitate to get in touch with our team today.