Where can landlords get the best yields for a smaller investment? Inventory Base has undertaken research revealing the five UK postcodes where buy-to-let investors can get the best yield with initial investment of under £100,000.
Inventory Base analysed average rental yield data in the UK to highlight which postcodes offer the highest yields for buy-to-let landlords - show that the average rental yield in the UK is currently 4.3%, based on an average house price of £333,030 and an average monthly rental income of £1,206.
However, a number of postcode districts offer significantly higher yields even when the investment cost comes in well below £100,000 - starting with the best, Bradford’s BD1.
In the BD1 postcode district, the average house price stands at £63,988 while the average monthly rent is £697. This results in an impressive average rental yield of 13.1% for buy-to-let landlords in the area. This is also the highest yield across all UK postcodes, regardless of the initial investment cost.
Leeds’ LS3 offers the nation’s second highest yield of 12%, but initial investment required is far higher, with the average house price coming in at £184,178.
So those buy-to-let investors who want to spend less than £100,000 might want to look at the nation’s third-highest yielding postcode - which is found in Sunderland.
Elsewhere in the country:
- Sunderland’s SR1 postcode district has an average house price of £66,769 and an average rent of £611 per month, generating an average yield of 11% as a result.
- Aberdeen’s AB24 postcode also has an average house price of £92,708 and with rents averaging £710 per month, the postcode boasts an average rental yield of 9.2%.
- In fourth place on the list for high yields with a sub-£100,000 investment is the TS3 postcode district of Middlesbrough. Here, the average house price is £90,528 and the average rental income is £648 per month, bringing an average yield of 8.6%.
- Finally, HU2 in Kingston-upon-Hull offers an average yield of 8.3% based on an average house price of £90,853 and an average rental income of £632 per month.
Steve Rad, CEO at Inventory Base, comments:
“Buy-to-let landlords don’t need to invest huge amounts of money to benefit from a strong rate of return and in some areas, you can invest in three properties for the price of the average UK home and build an instant portfolio with very strong yields.
"But it’s essential to remember that regardless of how much you invest, or where, your responsibilities as a landlord remain the same.
"Cutting corners operationally in order to maximise returns is a sure fire way to lose money in the long run and so it’s important to carry out every aspect to the same professional level, whether that be property management, securing a tenant’s deposit, or conducting inspections and inventory checks.”