When you’re considering purchasing a buy-to-let property, there are many factors to consider including associated purchase costs, tax, and average rental prices in the local area, one of the most significant figures to consider is the rental yield.
The rental yield is a percentage figure that provides you your annual return from the total amount invested in the property.
Rental yields should be a factor when selecting your buy-to-let investment strategy, but it shouldn’t be the only factor you consider when selecting an investment property as it really depends on your investment goals.
We select developments that have a high growth yield, but this is not the only factor we consider when handpicking a development.
The North West is an area synonymous with high rental yields. Most significantly, Liverpool has always been considered one of the top-performing cities for high rental yields. Other cities to consider in the golden triangle include Greater Manchester and Preston.
What is a good rental yield?
A good buy-to-let rental yield is now considered at 6%, while an excellent rental yield would be considered at 8% or higher. The definition of a good rental yield can also vary on property type from residential to student accommodation to HMOs and to commercial property.
Is a London a good location for a high rental yield?
Purchasing a buy-to-let property in London can be very expensive due to the high property prices, whilst the average rents in London are high, the typical rental yields are much lower compared to other parts of the UK.
A substantial number of the UK’s worst performing buy-to-let postcodes for rental yields are in London. Anything over 4% is considered a good rental yield in London with some areas performing below 4%.
One of our specialist buy-to-let advisors will be happy to answer any questions you may have about high yield investment properties and provide you with further detailed information on the specific development we are currently promoting.