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What property type has the best yields? Online agency has an answer

New data from online buy to let agency Yieldit claims to give an insight into which property types produce the best yields for investors. 

Drawing on the agency's current inventory, it says three out of the top five highest-yielding properties are houses with three bedrooms or more, producing net yields of up to 11 per cent.

It says this indicates that properties which can house multiple tenants or larger families make a smart investment choice, with returns additionally increased by houses often being freehold rather than leasehold, not paying a service charge and being self-managing.

More generally, houses as a group produced average net yields of 6.4 per cent followed by bedsits/studios at 5.3 per cent and apartments at 4.9 per cent.

The data also suggests that average one bedroom apartments command a 1.4 per cent higher net yield than two bedroom apartments, at 5.4 and 4.0 per cent respectively.

“Deciding on what type of property to invest in is one of the biggest choices a landlord has to make. Houses suitable for families remain a popular choice, and yields can be significantly higher when you remove costs like ground rent, service charge and self-manage – however it's important to note that this type of property might require more work and unexpected maintenance costs could affect annual returns” says a Yieldit spokesman.

“For those looking to invest in apartments, the data suggests that there is a growing demand for one bedroom apartments without parking. As environmental issues become more prevalent we can expect to see tenants opt for more environmentally friendly ways to travel and an unwanted parking space might push up the price for renters.”

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