Landlords: say yes to the best yields

Buy-to-let remains an attractive investment strategy but the temptation is to purchase a property and hold on to it for as long as possible, despite market conditions. Landlords always need to be aware of rental yields for the best return – appraising their current yield and working out if it would be better to sell up and start again in a more lucrative location.

What is rental yield?

Working out whether a buy-to-let will make you any profit involves a degree of maths. The rental yield is the annual rental income, as a percentage of the total value of the property. You can work out the yield of a rental property by dividing the annual rental income by the property’s value, then multiply this figure by 100 to get a percentage.

A good yield is considered to be in the region of 5%-8%, achieved by balancing the purchase price with the annual rent. As a rule of thumb, investors try to buy cheap and rent out high, while future price appreciation also adds favourably to the yield equation.

Location, location location

With house prices varying widely across the UK, many property investors look outside of their local area to gain the best yields. There are ‘sweet spots’ across the country where properties are more affordable to buy but the rental market is strong, allowing a good rent to be charged. Be aware, however, that the sweet spots change regularly and today’s high flyer could be tomorrow’s loss leader.

The keenest property investors are no stranger to yield chasing and won’t think twice about selling a property in their investment portfolio that has a poor yield in favour of replacing it with a buy-to-let in a city or town with higher yields.

Where are the best yields in 2021?

When exclusively taking into account rental yields, Aldermore Bank’s City Tracker was able to produce a list of the top 10 areas in the UK for rental yield, as follows:-

City	Rental yield
Hull	9.2%
Glasgow	9.1%
Stoke	8%
Wigan	7.9%
Doncaster	7.9%
Barnsley	7.9%
Sunderland	7.7%
Belfast	7.7%
Dundee	7.7%
Telford	7.7%

Sell investment property fast

Is your current investment property not in one of these locations? Move Places helps many landlords sell held investment properties so they can purchase new buy-to-lets in high yielding areas.

Our simple, fuss-free approach to sales suits the rental market and as a quick sale agency, we allow landlords to strike while the iron is hot and buy in generously yielding areas before the opportunity passes. What’s more, we purchase buy-to-lets with tenants in situ and you can read how this is possible here.

Start your property search now

Yield-chasing landlords can use our map function to view our properties for sale across the UK – zoom in on one of the 10 cities listed above and see what we’re selling and for how much. Move Places also matches landlords with great investment prospects at our online auctions – speak to the team for the catalogue of our next auction event, or for general advice about buying and selling investment properties.