Do bedrooms affect returns when purchasing a property as a Buy-to-Let investor

Property in Dunstable…

Do bedrooms affect returns?

I am currently helping a Client to source 3 or 4 properties as a Buy to Let investment. Last week 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 Dunstable, the average rent for a one bed property is around £521 per month with an average value of £95,611. This means an approximate return/yield of 6.5% per year. The average rent for a two bed property is £663 per month with the average value being £141,426, which gives a return/yield of 5.63% per year. When I looked at the three bed properties, the yield/return was only slightly lower. The average rent being asked for is £818 per month but the average value is £179,291, which would give a potential return/yield of only 5.47% per year. Four bed properties achieve a poor return/yield of only 4.74% per year, as average rents are £1,057 per month but the average value is £267,558.

The figures quoted are an average based on current values. With the right advice and research it is easy to improve on these. She is quite particular about the property she wants to purchase, but we have found her 1 bedroom apartments and 3 bedroom houses that will yield 7-8%. There is also a studio flat which is dated but with the cost of refurbishing included it will yield 9-10%.

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 are a landlord, whether you deal with us or not, feel free to visit our office on Church St, Dunstable to ask our opinion on which property investment is best for you.

More Buy_to_Let advice can be found here BTL Advice