Last week, I spoke to one of our 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 Grantham, the average rent for a one bed property is around £364 per month with an average value of £69,465. This means an approximate return/yield of 6.2% per year. The average rent for a two bed property is £465 per month with the average value being £93,749, which gives a return/yield of 5.95% per year. When I looked at the three bed properties, the yield/return changed quite drastically. The average rent being asked for is £517 per month but the average value is £137,118, which would give a potential return/yield of only 4.5% per year. Four bed properties achieve a poor return/yield of only 3.9% per year, as average rents are £718 per month but the average value is £220,938.
Whilst one bed properties do offer the best return they are harder to let and have more void/empty periods. The number of bedrooms is important, but it is only one of many factors you should consider before buying a property.
If you would like any advice on choosing properties, come and see us at our office on St Peters Hill.
