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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