One of our landlords asked if they should buy a two or three bedroom house to rent out to tenants. The first question I asked them was what are they looking for from the investment – capital growth in the property or straight forward yield?
Answering this question will help you figure out which properties you should buy…
The average asking price of a two bed house in Uxbridge is £311,500, but terraces can be picked up for around £250,000. Three beds average £358,750 but start from around £280,000 for a semi or townhouse near Cowley or towards Hillingdon. A three bed semi achieves an average rental price of £1,347 per month compared to £1,182 per month for a two bed.
That’s a yield of 4.6% for the two bed against 4.5% for the three bedroom house. But if you bought a nice two bed at around £270,000 which rented for £1,100pcm the yield would be 4.9%. Good property choice can improve your return over the average.
So surely, the two bed semi is the better bet? Well it does offer a better rate of return, but the three bed, appealing to families who may stay longer could well have less void periods and may be easier to sell in the future.
If you would like more information pop in to see us at our office on Hillingdon Hill, Uxbridge or call 01895 257935.
