Thursday, 20 November 2014

Eastwood Terraced houses - three beds or two beds ? Which is the best for Buy to Let?


 

 

Last week, I spoke to one of my landlords and she asked me if the number of bedrooms in a property had any relationship to the return she could get. I did some research and followed up her query – I was actually quite surprised with the results...

Currently in Eastwood, the average rent for a two bed terraced house is around £478 per month with an average value of £82,100. This means an approximate return/yield of 6,98% per year. This is of course the average as there are some two bed terraced houses on the market for rent at a higher price than some three bed terraced houses. In fact, some two bed terraced houses in Eastwood can attract rents in the early £500’s whilst some smaller terraced houses can be rented for as little as £430 per month. This means yields on three beds can range between 6% and 9%.

Three bed terraced houses in Eastwood can be priced anywhere between £120,000 in one of the better streets in Eastwood and as low as £85,000. Again, rents can be quite varied, ranging from over £475 per month to £550 per month. However, looking at the average rent for a three bed terraced house in Eastwood, I calculate it to be £497 per month with the average value being £101,300 which gives a return/yield of 5.88% per year.

Quite obviously a two bedroom terraced house offers a much better yield than the three bedroom terraced. Whilst three bedrooms are more expensive to buy, sometimes they will let better. Do they sell better? Well, 25% of the three bed terraced houses on the market in Eastwood at this moment in time are sold stc compared to 26.8% of two bed terraced houses – so not much difference there.

It really comes down to the property and type of tenant. Three beds attract sharers, which brings both advantages and disadvantages to the landlord but two beds have better yields. It depends what you want from your investment. I know the lettings market in Eastwood so I can advise you what you can expect to achieve in rent and how it go up in value together. I don't sell property, so I don't make a penny out of you buying something, I make my money ensuring I can find the best tenants for the best properties. If you would like any advice on choosing properties, come and see us at our office in Heanor or email me at lettings@sprucetree.co.uk.

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