We all know the story of Goldilocks and The Three Bears, but you may not have heard of the lesser known sequel Goldilocks and The Three Buy-To-Let Investment Properties.


The first property she bought was too expensive.  She found that the demand for higher value properties wasn’t strong, and she had to wait a long time for a tenant. Even then, the tenant negotiated a much lower rent than she had hoped.  As it was a big property, the repairs which it needed wmade the running costs of the property very high.  The tenant soon moved on, as somebody who can afford to pay a high rent will often aspire to own their own home, and once again the property was left empty, leaving Goldilocks to service the mortgage on her own.


The second property Goldilocks bought was too cheap.  The property did need a lot of work to get it upto scratch, but after that things looked promising.  At first she was swamped with applications from potential tenants, and the rental yield was brilliant.  Unfortunately soon after they moved in, the tenant defaulted on their payments and after a long legal battle, Goldilocks was thousands of pounds out of pocket.


The third property she bought was valued in-between the two.  It was just right and she lived happily ever after.


Of course, this is just a story, and even if you do find a property valued in the ‘Goldilocks zone’, it is very unlikely that it will be a happily ever after, because letting properties is hard work and it won’t run smoothly forever.


There is no set price range for the ‘Goldilocks zone’, and it varies widely from region to region.


The value of the property is just one consideration.  Properties of different values, types, shapes and sizes all come with their own risks and potential rewards, so you need to be careful when choosing your investment.  Be prepared and don’t go wandering aimlessly into the woods.


Jason Hinde FPFS, Cert SMP – Chartered Financial Planner

6th November 2017

The Buy-To-Let Goldilocks Zone