What average buy-to-let yield can I expect?
Q: I am looking to invest in my first buy-to-let property, what average rental yield should I be expecting?
Submitted by: Mr. O, Kennington / 20th August 2009
Pic: Buy-to-let gross yield explained
Right now at ludlowthompson you can find buy-to-let property with gross yields up to 8.7%, which is a very healthy return. Yields vary throughout the market, and the expected gross yield from your property will be affected and determined by your own investment strategy.
If you are looking to achieve the maximum rent from the minimum purchase price, then look at ex-local authority property. These properties are cheaper to buy and generally offer larger rooms which appeals to the tenant sharers market. This will maximise the rental price, and minimise the gap between tenancies.
Conversely, if you are looking for a property in a prosperous area with only one or two bedrooms your rental yield is likely to be lower.
To calculate the estimated gross rental yield on your investment property:
Gross annual rental yield = (Annual rent / Purchase price) x 100
At ludlowthompson website the estimated rental yield for each buy-to-let property has been calculated for you. You can even search specifically for a buy-to-let property, choosing whether to search by the property price, or the calculated annual yield.
Obviously your net rental yield will be influenced by the cost of maintenance and property upkeep. You will need to factor in your council tax and any ground rent charges and mortgage costs. Many rental expenses can be offset against tax. Always seek professional financial advise from a qualified financial adviser / accountant when making investments.
Neither ludlowthompson nor their ‘experts’ take any responsibility for any action or loss incurred by readers of these pages. The reader acts on advice at their own risk. Answers to questions are not exhaustive. Financial advice must always be sought from a professional financial adviser.
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