If you are looking for a reasonable return on your investment don’t discount ex local authority properties. They make good rentals as they are generally well built and offer tenants lots of storage which is always a plus. I recently found a property advertised by Your Move in Andover on Galahad Close for the asking price of £150,000. The average rental in that area is £775pcm, depending on the condition. Therefore even if you were to buy this property at the advertised price this would still represent a very respectable 6.2% yield on your investment.
Likewise ex local authority flats offer good value for money and again tend to offer good storage and occasionally garages. The management fees are very often lower on these flats but beware as the management company do not hold much of a sinking fund as with other block management companies. Therefore when additional work is required such as repairs to roofs, decorating communal areas etc they will send you a bill! Click here for a good example of an ex local authority flat which again offers a yield of around 6.2% even if buying at full asking price as a monthly rental value of £650 should be achievable: