What yield should you be making on your rental property?

Lets take a look at what yield you should be making on your property in Newton Le Willows & Haydock. Take a look at the video and get in touch to talk about your next investment!

What yield should you be making?

If it was up to you then obviously you would be paying the lowest price possible and making the biggest yield possible, but unfortunately it’s not all down to you.

We have to take 3 things into consideration. Firstly the property market, this will determine how much the property is worth for sale and for rent. The other two factors are obviously yourself and the vendor.

So what are the best steps for achieving the best yield? Well there is no magic button or formula I’m afraid it’s all down to experience, knowledge of an area and the research you do.

Remember all areas are different and this will affect the yield you can achieve. Now if you decide to yield chase and find the best yield possible, you can often find yourself having to compromise and purchase in areas that are seen as less desirable. This could lead to having to deal with more difficult tenants and also longer void periods. Why is this? Well, if you buy a property deemed to be in an undesirable location then the only people that are going to live there are the people that have to, it’s a harsh but true assessment and one you should consider when deciding what kind of properties you want to buy. Not only that but the property value may not increase as much as it could in a more desirable area, when it comes to selling the property down the line.

Now this is not an exact science and to think that low end properties are always going to give you problems would be nonsense, but you have to weigh this up when considering your purchase.

If yield and profit are the most important thing for you, then a traditional buy to let might not be the best option for you. Buy to let’s tend to give you a nice income stream now and gradual growth over time. Another route you could explore are HMOs, this is where you buy a bigger property and rent it out by the room. The rent you tend to collect on these tends to be higher in comparison to the property price obviously leading to a larger yield, but like I said earlier this does involve bigger risks.

HMOs tend to be more hands on for a few reasons. There are a lot more regulations in place which mean it’s going to take you longer to set up and most likely going to cost more money. Lending is more complicated and your capital growth tends not to be as high as a traditional buy to let.

So it all comes down to balance and how you want to weigh up the various factors involved. It can be overwhelming especially for new landlords. Here at THINK we offer free impartial advice on buy to lets and give you our opinion on what might be best to do.

So if you are looking at a property in Newton, St.Helens or Warrington please get in touch and we will be happy to give advice on yields and the property even if it’s not for sale with us! 

Call us on 01925 290290 or 01744 371371 for some free property advice



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