With modern technology allowing landlords to manage their lettings online and the ability to have rented properties managed by 3rd parties rather than doing it yourself, the option to purchase properties to let nationally has never been more attractive. A Landlord based in the South West can easily rent a property out in Cumbria as easily as if it was just down the road.
Given this freedom for long distance lets, it’s important to understand where you can make your investment work the hardest for you. In this article we highlight the areas which are currently the best for buy-to-let properties.
Based on Yield
The rental yield is basically the percentage you get when you divide the amount you are likely to receive in rent by the amount you have invested. Remember this does not take into account any money needed to maintain and administer the property. According to Zoopla a yield of 7% or more is considered very good.
According to Landlord Today, Scotland is a good bet when looking to invest. Areas such as Glasgow, Midlothian, East Ayrshire and Dunbartonshire are giving rental yields of 6.1% - 7.5%. This makes these areas particularly attractive to invest in.
Based on Capital Growth
Not everyone will put rental yield at the top of their priority list in terms of looking where to purchase. It could well be that you are simply looking to cover the mortgage of the property but are looking for long term capital growth to give you a nest egg in later life. As long as you can afford any shortfall between the mortgage payments and other outgoings and the rental income then you might want to simply look at the growth in prices for where you want to invest. Bear in mind though that good capital growth now does not guarantee future increases.
According to the same figures published by Landlord Today, North Devon is seeing a boom in property prices with an increase of 15% over the last 12 months. Other potentially good investment areas are parts of Wales which have seen price rises from 11 – 13% year on year. If you’re looking in London, then Camden, with average price increases of 10%, is the best bet.
Given the changing nature of the lettings sector and the fact that landlord’s with small portfolios can now manage their investment easily, even at the other end of the country, you are no longer restricted to investing in your local area, you can move further afield to maximise the earning potential of your property. This is especially true if you partner with a national letting agent. Belvoir has 165 letting offices throughout the UK and a variety of landlord focussed service levels, even more reason to cast your net further a field!