Eager to make your first property investment, but unsure which area or type of property would deliver the best returns? Get in touch with the experts!
Here at Mistoria Group, we have decades of experience in the property management, investment, and sales/lettings industry, so we know where to look if you want those yields skyrocket.
How to get high yields from property investment
While the type of property you choose to invest in is always important when trying to achieve the best rental yield, there are other factors to consider including the location and the requirements of your preferred tenant.
To help you make the best decision when it comes to securing high yields in property investment and boosting your rental returns, we explore some of these factors in more detail below!
Identify your ideal yield
Based on statistics produced by Track Capital, the average UK rental yield is 3.63 per cent. As a result, you may believe that any yield above this average figure could be considered ‘good’.
However, Paragon Bank has also identified that student property investors have been able to achieve comparatively incredible yields of between 13 and 18 per cent in the Private Rented Sector (PRS) over a period of five years.
While some property investors may be content with a yield between five and eight per cent, if you want to receive more profitable rental returns, it’s wise to contact the professionals and identify the best rental yields for the property type, size, and location your budget can afford.
Consider your property investment options
Some of the most common property types for potential investors include buy-to-lets (BTLs), houses of multiple occupation (HMOs), and student accommodation.
While BTL properties can still generate a good rental return, typically, student properties and HMOs tend to deliver a much higher yield per month. This is because a singular household renting a standard three-bedroom BTL is likely to pay in the region of £700-£900 per calendar month.
If this same property, however, were to be converted into a three-bed HMO, you can expect to ask each separate household to pay between £500-£700 per calendar month, depending on the size, location, and level of finish at the property. In total, you could therefore receive up to three times the return if you opt for an HMO.
There’s also significant demand for both accommodation for young professionals and student properties in the UK. Based on UK Parliament figures, during the year 2020/21 there were a massive 2.66 million higher education students studying in the UK.
Of these 2.66 million students, roughly 30 per cent were living in private rented accommodation. Similarly, with the cost of living increasing, young professional renters are searching for more affordable alternatives (such as HMOs) to traditional BTL properties to help keep costs down.
Heavily research the area
Instead of opting immediately for London and the surrounding areas, why not spare yourself the higher property prices and research other profitable areas of the UK?
The North West of England, for example, has reaped the rewards of substantial investment, regeneration, and a wave of renters migrating from London to more affordable locations.
Hotspots for property investment in this area include Liverpool (L1, L2, L3, L4), Manchester (M14), Bradford (BD1), Leeds (LS2, LS4), Yorkshire, and even Newcastle Upon Tyne, so why not expand your property investment horizons and a look a little further than London?
Choose the best type of investment property for the area
Now you’ve considered both the type of investment property and the location, you’ll need to make sure these the two choices you’ve settled on work well together. For example, it doesn’t make sense to invest in a student HMO in a location that lacks a higher education establishment.
Following the same vein, it would be unwise to purchase a standard BTL property within an area that has a thriving student or young professional population. While most big cities tend to have a healthy number of students living in the area, it’s always worth doing your own research or reaching out to a professional estate agent to gauge the level of demand.
Consider the needs of your target tenant
Before you automatically opt for a BTL or HMO, it’s vital to consider your target market first. For example, if you do plan on investing in the student or professional HMO market, you must ensure the property is fully equipped to meet their needs if you want to secure the highest yields.
Ensuite bathrooms, high-speed internet access, designated working areas, and plenty of kitchen storage are all sought-after features of an HMO that are likely to help you obtain a better rental return. You will therefore need to look for properties that already come with these amenities or purchase a property with some cash to spare if it requires alternations and additions.
Discover high yield property investments today!
Regardless of which property seems the most appealing, always do your research first if you want to achieve high yields in property investment.
Alternatively, why not get in touch with a team of property investment experts and ask them to do the hard work for you? With their guidance and support, you can avoid making a costly decision and damaging your high-yielding property portfolio.
Thanks to more than 100 years of invaluable experience helping our clients secure high-yield property investments across the North West of England, you couldn’t be in safer hands. We have in-depth knowledge about the property market in Salford, Bolton, Manchester, Liverpool, and further afield.
To find out more about our services and the way we work, please feel free to give our friendly team a call on 0800 500 3015.
Regardless of how you choose to reach out to our team, you can rest assured we’ll be in touch shortly to find out more about your property investment requirements!