December 1, 2020
It may be famous for its jam, jute and journalism, but what about Dundee buy-to-let property investment?
The Dundee property market has had a few false dawns, but with lots of new regeneration, including plenty of investment (£1 billion worth!) and planning around the waterfront, Dundee property prices have seen one of the biggest annual growths in Scotland.
Perhaps previously lacking in identity, Dundee is a south-facing Scottish city with a great outlook, becoming known as a place of culture, tourism and diversity – and because of this, a lot of property investment could be driven by short-term lets.
But even more exciting is the fact that the city is currently being considered for freeport status! Meaning firms will be able to import goods and then export them outwith normal tax and customs rules – giving the city a strong post-Brexit appeal.
Freeports allow firms to import goods and then export them outside normal tax and customs rules and have been highlighted as a post-Brexit tool to encourage economic activity.
With a population of around 160,000 in the city itself, Dundee is a university city, and there are also plenty of great job opportunities and rental demand right now – on the whole, we are big fans here at Portolio!
So, what can you expect from Dundee buy-to-let property investment – and, what do you need to know? Read on to find out, along with some extra tips, advice and insight!
NOTE: As Scotland’s only estate agent for landlords, this is part 4 in a series of overview guides covering some of the best Scottish cities to invest in. You can check out our overview of Glasgow here, Edinburgh here and Aberdeen here.
Property values
Recently dubbed as one of the easiest cities in which to get onto the property ladder, Dundee’s average property price is £155k. Compared to the rest of the UK, this is still relatively cheap, and Zoopla shows property in Dundee starting from as low as £50k.
With all the regeneration going on, it seems like every time I open up LinkedIn I see the likes of Graeme Carling doing some good things in terms of Dundee property investment – and I can see why it is so attractive.
So, is Dundee a relatively safe and profitable investment?
Morton Simpson, from Thorntons Property, recently told the Evening Telegraph:
“Within reason Dundee is a relatively safe place to invest in. The city has never really had big highs, but it has also never really seen big lows, meaning that if there is a crash in the economy, home owners shouldn’t see too much of a change.”
Interesting fact! Did you know that Dundee’s Broughty Ferry area was once home to the most expensive postcode in Britain, during the whaling industry circa 1850? Well, you do now!
Yields
With strong yields, Dundee has an advantage in that it covers all the markets. First-time investors can enter the Dundee property market for just £50k, and see up to a 10% return on investment, according to property pro Ron Campbell.
Dundee’s average yield comes in at around 7.2%, mainly due to the fact it sees so much rental demand from students – and rental yields in Dundee (much like Aberdeen and Glasgow) are much higher than the UK average of 4.4%.
Here’s a graph to give you a better idea:
Jobs
Journalism is still at the heart of Dundee (serving as the headquarters for press giant DC Thomson), however nowadays the economy is mainly focused on light manufacturing as well as the business and finance, public services and education.
The most exciting aspect about Dundee right now is the fact that Dundee is quickly establishing itself as the growing centre for biomedical, biotechnology, software and tech industries (Grand Theft Auto and Minecraft were both born here).
This means a lot of fresh, talented people flocking to the city in search of well-paid jobs in these emerging new industries – proving there is a lot still to come from this gem of a city.
Amenities
Dundee is establishing a name for itself as a hub for the arts, along with a thriving cultural and social scene – partly due to the large student population and creative community.
The striking new V&A has brought the city a lot of interest recently, helping Dundee to become the UK’s first UNESCO City of Design – something that has really made investors sit up and take notice.
Dundee is also on track to soon become home to The Eden Project, the first environmental tourism site in Scotland, expected to drive tourism by bringing visitors in their millions to the city.
As in any city, there are plenty of shops, lovely little cafes and restaurants, and some historic treasures to explore (like HMS Unicorn and Broughty Castle Museum!).
Transport
With a good public transport in place, it is simple enough to get around Dundee by bus with a system that is easy to navigate – although mostly you can get to where you need to be either on foot or by bicycle.
With fantastic transport links to Edinburgh (just 80 minutes away by train) and Glasgow (just 90 minutes by train), living in Dundee means you can easily take a day trip to other cities – or spend a few hours in the historic town of St Andrews, just 10 miles away!
There is also Dundee Airport, which has direct flights to London Stansted.
Universities
Home to the University of Dundee (17,000 students and 3,000 staff), and the smaller Abertay University (4,200 students), around 1 in 7 people living in Dundee are students.
I know I briefly mentioned the large student population before, but Dundee is one of the major university cities in the UK, with a higher proportion of university students (1 in 7) than any other town in Europe, except Heidelberg.
Interestingly, the Duncan Jordanstone College of Art and Design, located at the University of Dundee, is world renowned and widely considered one of the best art schools you will find in Europe.
Abertay University is also home to the first ever university Centre for Excellence in Computer Game Education.
Variety
As I mentioned above, Dundee covers all bases when it comes to property. The West End (with good local amenities and lots of green space) and City Centre (bubbling with activity) are widely thought of as the places to be.
However, there is also North and East Dundee, with a good range of tenements, semi-detached and terraced houses – with a fair bit of regeneration happening, too. Areas of interest in the vicinity include Broughty Ferry, Monifieth, Tayport and Carnoustie.
Quality of life
Although it is not, as often said, the sunniest place in Scotland, Dundee is not a bad place to live or spend time in. With the wild Tay estuary running past, it can be a stunning place to take in the views and stop for a breath of fresh air.
There is plenty of green space and scenic countryside close by, and Dundee as a city has been on the up over the past 20 years, with what all the regeneration projects along the waterfront. Traffic is usually light, and there is plenty to see and do.
Don’t get me wrong; there is still the aftertaste of deprivation in Dundee from its failed industrial past, and the winters can seem dark, but on the whole there are many exciting things on the horizon for the city, drawing in lots of new, talented people from afar.
Advice from the property pros
Dundee is a great wee city for investing in buy-to-let, if you know where to look. Certain areas are ripe for property investment, and I have personally noticed there seems to be an overall improvement in the quality of lets in the city, and increased rental demand.
With that in mind, hopefully rents will be on the up – and yields, as a result. In the right area, you can pick up a two-bedroom flat for around £65k. But it would be remiss of us not to mention that not every buy-to-let property is equal, and just like any investment, there is always an element of risk involved.
My best advice to you is to thoroughly research any area you are interested in, and visit the property before making any purchase.
If Dundee is a new investment area for you, or you’re purchasing remotely, we have provided some tips when attending a virtual viewing. These tips provide some great rules of thumb if you are unfamiliar with an area, but it is also likely you will attend a virtual viewing first for any Dundee buy-to-let property investment.
TIP: Also, if you have time, check out this blog we published recently covering some of the main things to consider when investing in your next buy-to-let, post lockdown.
If you feel you could benefit from some more specific advice regarding Dundee buy-to-let property investment, it would also be a good idea to speak to a specialist estate agent who is experienced in property investment.
They should be happy to listen to your goals, and help you thoroughly explore all your options – including the option of buying an already tenanted property and receiving instant rental income on Day 1 (or as we call it, ‘The Portolio Way’).
In summary
Thanks for taking the time to read. Dundee is providing lots of great new opportunities to invest in property, whether you are a first time investor, or a property investment veteran.
Just remember; if you are unfamiliar with the area you are purchasing in, check values and what similar properties in the area are going for, as well as perhaps seeking out some specialist advice to ensure you are making the right investment for you.
Looking for advice on Dundee buy-to-let property investment – and buying tenanted property in particular? If so, we’d be delighted to hear from you, and would be happy to lend an ear and offer you some free, no-strings advice.
After all, we are Scotland’s only estate agent for landlords, and we pride ourselves on helping to make property investment accessible for everyone.
Happy investing!
Written by Ross MacDonald, Director of Sales & Co-founder of Portolio
Get in touch on 07388 361 564 or email to [email protected]
Comments