I was
talking to a potential landlord in the Penryn 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. A
lower priced studio flat might sell for £90,000. The average rent is around £500pcm making an
annual rent of £6,000 and a yield of 6.6%. With a 1 bed the yield is around 5.7%, a 2 bed
4.5% and a 3 bed around 3.9%. 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 or to talk letting property in
general, feel free to come into our office on Killigrew Street Falmouth. We
don’t sell houses but we will help you find a good buy-to-let property.
Annabel
Leach
Belvoir Lettings Falmouth
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