New research by UK Estate agent “Haart” has revealed that one bedroom rental properties generate the highest rental yield for landlords and Buy To Let investors,.
The research found that the annual yield on a one bedroom property in England and Wales is currently higher than yields for two or three bedroom properties.
The findings could be useful for Buy To Let mortgage holders and property investors planning to expand their rental property portfolio’s this year.
The findings revealed that a buy to let investor with a one bedroom property could expect to generate average yields of 6.89% per year.
This is compared to a two bedroom property, which was found to generate an average yield of 6.1% per year, and rental yields on three bedroom properties were found to be even lower, generating an average 5.4% per year.
The results also discovered that cities in the East of England, such as Colchester, offer the best Return on Investment (ROI) for one bedroom properties, generating average rental yields of as much as 9.3%.
Despite the strong rental yields for one bedroom properties, it must be pointed out that they generally have the highest turnover of tenants, compared to two and three bedroom properties, which often keep the same residents for several years.
Earlier this year, research by Mortgages for Business found that complex Buy To Let yields are still outstripping standard residential property yields.
Their research uncovered the fact that Houses in Multiple Occupation (HMOs) generated average yields of 10.7% in the first quarter of this year.
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