I was having a chat to a gentleman who has been considering purchasing a buy to let investment in the Yiewsley/West Drayton area and he wanted to know the best type of property to start out as a landlord.
First of all we discussed 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 higher the return. As we increase the number of bedrooms the tends to drops. So a lower priced studio flat might sell for £120,000, the average rent is around £650pcm and so the annual rent would be £7,800 and so the yield is 6.5%. With 1 beds yield is around 5.2%, 2 beds 5.1% 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. In the last year West Drayton property prices have risen by around 9%.
As I explained to my gentleman, you need to bare in mind what you want from your investment. A steady income stream or a greater chance of capital growth or perhaps a balance of 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.
