Last week, I spoke to one of my landlords and she asked me if the number of bedrooms in a property had any influence on the return she could get. I did some research and followed up her query – I was actually quite surprised with the results...Currently in Derby, the average rent for a one bed property is around £398 per month with an average value of £68,700. This means an approximate return/yield of 6.95% per year. This is of course the average.
There are one bed apartments on the market for rent at a higher price than some two bed apartments. In fact, some one bed apartments in Derby can attract rents in the late £600's whilst some converted terraced houses with flats in them can be rented for as little as £230 per month. This means yields on one beds can range between 4% and 9%.
Two bed apartments in Derby can be priced anywhere between £230,000 in one of those modern upmarket developments in Littleover and as low as £40,000 in Alvaston. Again, rents can be quite varied, ranging from over £700 per month for some bespoke unique apartments in the gated development’s in Derby to £350 per month in Alvaston or around Pride Park. However, looking at the average rent for a two bed apartment in Derby, I calculate it to be £539 per month with the average value being £109.300 which gives a return/yield of 5.9% per year.
Whilst there is a little difference in the yields when it comes to the number of bedrooms, it is only one of many factors you should consider before buying a property. Whilst two bedrooms are more expensive to buy, they will always let better. Do they sell better? Well, 23% of the two bed apartments on the market in Derby at this moment in time are sold subject to contract compared to 25% of 1 bed apartments – so not much difference there.
It really comes down to the property and type of tenant. Two beds attract sharers, which brings both advantages and disadvantages to the landlord but one beds have better yields.
It depends what you want from your investment. I know the lettings market in Derby so I can advise you what you can expect to achieve in rent and how it go up in value together. I don't sell property, so I don't make a penny out of you buying something, I make my money ensuring I can find the best tenants for the best properties. If you would like any advice on choosing properties, come and see us at our office on St. James Street.
If you would like to discuss anything further then please pop in and see me, send me an email or call me directly on 07977 235545.
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