I was chatting with a landlord who had read my article asking "How expensive is Chichester property?". He commented that whilst he found the £ per square foot data interesting, he didn’t think it was of any real use.
I’m afraid I had to disagree!
In fact, £ per square foot is one of the metrics I always calculate when analysing a potential property purchase (property price divided by total square footage of the property).
It can be a good gauge as to how much you should be paying for a particular property, as well as being a good comparison of different areas. For example, I often say I like Fishbourne, Tangmere and Westhampnett as they are popular amongst renters and offer a little more ‘bricks for your buck’ than Chichester.
This is shown in the average £ per square foot paid for a house in each area: Chichester costs £336 per square foot, Fishbourne £309, Tangmere £295 and Westhampnett £318.
However, what is of even more use is when comparing properties near to one another. For example, I was recently tasked with finding a modern three bed house in Fishbourne. There were three available at the time, all within 200 yards of one another and each of a similar age and specification. They were priced at £289,950, £315,000 and £325,000.
Seems pretty obvious which one to plump for right? This is where my trusty £ per square foot calculation came in handy.
The three bed house at £289,950 was set over two storeys and had a footprint of 887 square feet, meaning it cost £327 per square foot.
The three bed house at £315,000 was also the traditional two storeys high, but had a far greater footprint of 1,125 square feet, meaning it cost just £280 per square foot.
Even better value was found from the most expensive three bed house though. Set over three storeys it had an impressive 1,315 square feet; meaning you were paying just £247 per square foot.
Whilst the rental figure may only be around £150 a month more for the extra 433 square feet of space (meaning the gross rental yield is comparable) I am confident as to which property will be the more appealing to prospective tenants and thus let quicker.
If you are thinking of buying a rental property and would like me to crunch the numbers on it to ensure you are maximising your investment, please get in touch.