Town house or traditional. Which makes the best investment?

A landlord came to our office for advice, just after Christmas, asking whether he should buy a three bedroom semi-detached house in the Augusta Park development.

We did some research and found a nice three bedroom semi-detached house on Barley Road for £225,000. We worked out the possible rent for this as £925 per month, which could achieve an annual yield of 4.9%. The properties in this area are quite popular with families and tend to have a great demand with investors and tenants alike, making it a relatively good investment.

A three bedroomed semi-detached town house on Herdwick Road, has a value of £240,000. The possible rent for this property is slightly higher, at £1000 per month, as it is slightly larger than the one on Barley Road. We found that although the rent can be higher, the annual yield was similar at 5%.

This shows that while a property can achieve a higher rents, it does not necessarily mean higher returns.

If you would like anymore advice on buying a rental property comment below or take a look at the rest of this blog.