One of our landlords asked if they should buy a 3 or 2 bed semi-detached property 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 a great yield?
Answering this question will help you figure out which properties you should buy…
The average asking price of a 3 bed semi in Dunstable is £192,500 today compared to £175,000 for a 2 bed semi. The 3 bed semi achieves an average rental price of £850 per month compared to £684 per month for a two bed semi.
That’s a yield of 4.7% for the 2 bed against 5.3% for the 3 bed. So surely, the 3 bed semi is the better bet? Well it does offer a better rate of return and is further evidence of the changing rental market that we have been experiencing. More families are deciding to rent and their requirement is for a good quality 3 bedroom family home. Some of these families have sold their current home and are renting until they find a property to purchase and they are in a strong position as a buyer without a chain. A number of these families start renting for 6 months, but have ended up staying for 12-18 months if they are happy in their rented house and are willing to wait for the perfect property to buy.
For Landlords looking to invest the 3 bed semi is slightly easier to rent out (less void periods) and will be easier to sell in the future.
If you would like more information pop in to see us at our offices on Church St, Dunstable and read more about our Landlord services here
