I

nvesting in Huddersfield's buy-to-let property is different from investing in the stock market or depositing your hard-earned cash into a building society.

When you invest your money in the building society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best two-year bond rate from Nationwide is a whopping 0.75 per cent a year). Another investment is the stock market, which can give good returns. But unless they can be on the phone every day to their stockbroker, most people end up investing in stock market funds, which makes the investment hands off.

However, with buy-to-let, things can be more hands on. One of the things many landlords like is the tactile nature of property – the fact that you can touch the bricks and mortar. It is this factor that attracts many of Huddersfield’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways.

When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in Huddersfield, but the value of property does go up as well as down, just like shares do but the initial purchase price rarely decreases.

Rental income is what the tenant pays you – hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last five years, an average Huddersfield property has risen by £23,200 (equivalent to £12.71 a day), taking it to a current average value of £166,400. Yields range from five per cent a year and can reach doubledigit percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. Flipping means buying a property, carrying out some minor cosmetics and re-selling it quickly). I have seen several investors who have made decent returns from this strategy.

For example, one Huddersfield investor paid £115,000 for a two-bed terrace on Birdsedge Hill in May 2015. Some cosmetic work was done to the property and it was resold a few months later (November 2016) for £135,000. This equates to 17.39 per cent return before costs, or compound annual return equivalent of 11.10 per cent AER.

This demonstrates how the Huddersfield property market has not only provided very strong returns for the average investor over the last five years, but how it has permitted a group of motivated buy-tolet landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Huddersfield people may be giving up on owning their own home and are instead accepting long term renting. Meanwhile, buy-to-let lending continues to grow from strength to strength. If you want to know what (and what would not) constitute a good buy-to-let property in Huddersfield, then look to the Huddersfield Property Blog. Visit huddersfieldproperty. blogspot.co.uk