When choosing an investment location, it is important to be able to accurately assess the likely rental yield you are going to achieve. There are some really simple and ways you can use freely available data online to find out how much a property is likely to rent for.
Firstly, try searching on rightmove.com for property for sale in a given location that match your budget. Choose a postcode with a ¼ mile radius and specify a number of bedrooms and a property type such as terraced or semi-detached. Select the ‘include under offer, Sold STC’ option which will give you a larger data sample to compare. Check the results and take note of price variations across different examples. You may notice pattern in the pricing of different types of property.
Next, in a separate browser search the same postcode location with a ¼ mile radius, but this time select properties to let. Choose the same number of bedrooms and property type as with the sales search and select the ‘include let agreed’ option. By selecting this option, you will get to see a larger set of data which will allow you to make a more accurate assessment of likely rental income.
Now, try to match the type and location of the properties to rent as accurately as possible as the ones for sale. Broadly speaking, in the UK you are going to see the same types of houses again and again. You will see old Victoria era stock built up until around 1900. In northern cities these are typically red bricked terraces. You will also see a lot of 1930’s housing, which will often feature bay windows and arches over the front door. Then there is ex-council stock typically built in the 1960’s and 70’s and new build properties – which will simply look a lot more modern.
By comparing a few for rent with similar for sale properties you can easily assess how much rent a certain property for sale is likely to achieve, allowing you to make Smarter Property decisions.