One of our landlords asked if they should buy a two or three bedroom house to rent out to tenants. The first question I asked them was what are they looking for from the investment – capital growth in the property or straight forward yield? Answering this question will help you figure out which properties you should buy…
The average asking price of a two bedroom house in Maidenhead is £330,000, but terraces can be picked up for around £260,000. Three beds average £468,000 but start from around £300,000. The three bed semi achieves an average rental price of £1,400 per month compared to £1,200 per month for a two bed.
That’s a yield of 4.36% for the two bed against 3.59% for the three bedroom house. But if you bought a nice two bed at around £260,000 which rented for £1,200 pcm the yield would be 4.8%. Good property choice can improve your return over the average.
So surely, the two bed terrace is the better bet? Well it does offer a better rate of return, but the three bed, appealing to families who may stay longer could well have less void periods and may be easier to sell in the future.
Property data sourced from Zoopla, Rightmove and Mouseprice UK. (11/2014)
If you would like more information concerning this topic or need any other advice concerning lettings you can contact me on 01628 782577, www.belvoirlettings.com/maidenhead or alternatively via email at dominik.potworowski@belvoirlettings.com
