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The aim of the landlord game is to find the perfect property – one that offers a high yield as well as great capital gains. This is not always easy, as it depends on whereabouts in the country you live. You also need a crystal ball to be able to predict what tenants are likely to want in 12 months’ time.
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One-Bed Flats Offer Top Yields
A recent survey by short term property finance company, Amicus, has found that landlords think one-bed flats are most likely to generate the best yields, while two-bed flats will offer the best capital gains. Student accommodation, two and three-bed flats are also high on the ‘must buy’ list for landlords, along with traditional terrace properties.
Flats Win Over Estate Properties
Interestingly, landlords tend to avoid properties on established housing estates, as they offer the worst rental yields, but new builds are more popular than older properties, probably because they are more energy efficient and require less work to make them attractive to tenants.
“Flats are the clear winners over houses and maisonettes for both capital growth and rental yields and this is reflected in our own experience in servicing professional landlords’ short term borrowing requirements,” says John Jenkins from Amicus.
Other research has indicated that landlords in the north of England generate better rental yields when they buy up multiple properties. For example, a Durham landlord with two three-bed properties would enjoy a yield 200% higher than a London landlord with just one studio flat. He would also have a much lower stamp duty bill!
