Almost every single day, we receive a call from potential tenants looking to move into the Bushmead area of Luton, and mainly from young families looking for modern family homes.
So it was interesting when one of our landlords recently came to see us at our offices on Marsh Road asking for asisstance in buying her next investment property. She was particularly seeking advice as to whether to buy a 2 bed or 3 bed house. She currently has a two bed that we have let and managed succesfully for the last few years.
Looking on Right Move, we identified a three bed property on the market for £197,500. The property had a new kitchen and bathroom – massive plus points in our opinion – and was pretty much ready to move into. Given the strong demand from families, we are able to rent these houses day in day out for £875 per month, providing a potential yield of 5.3% for the landlord.
For comparison, we located a two bed terraced house, on the market for £149,000. Again a well presented property with modern kitchen and bathroom. As a comparison, we have actually let a similar property on the same street for £675 this year, giving a potential yield of 5.4%.
So which would make the best investment property for our landlord? As stated, Bushmead is a highly desirable area and both properties should let quickly in the current climate and both would make a sensible investment. In the end the landlord plumped for the 3 bed house, citing future capital growth and potentially fewer void periods as the deciding factors.
For more impartial and free advice on Buy to Let and any of the above contact Adrian at our office on Marsh Road in Luton.