I was talking to a potential landlord in the Uxbridge area and he wanted to know the best type of property to start out as a landlord.
So I explained yield. Yield is a calculation used in letting, which shows the annual rent expressed as a percentage of the house price. The higher the yield the better the return. As we increase the number of bedrooms the yield drops. So a lower priced studio flat might sell for £109,400, the average rent is around £660pcm and so the annual rent would be £7,920 and so the yield is 7.2%. With 1 beds yield is around 6.5%, 2 beds 5.7% and 3 beds 4.2%. These are averages and will vary from property to property.
However (and isn’t there always a however!) the larger houses tend to appreciate more quickly in value, and tend to be freehold so don’t incorporate service charges and ground rent. As I explained to my customer, you need to keep in mind what you want from your investment. A steady income or a greater chance of capital growth or a balance of the both!
If you would like our opinion on what to buy, feel free to come into our office on Hillingdon Hill. We don’t sell houses but we will help you find a good buy to let property.
