I met a couple this week who have decided to buy their first buy to let property. They have £200,000 to spend and wanted some advice as to what type of property to buy.

We looked at a two bedroom freehold house in Hollybrook Gardens in Locks Heath which is currently being marketed for sale by Austin and Wyatt. It is on the market for £195,000 and the projected monthly rental is £795. This would therefore provide a yield of 4.89%.

We compared the house with a modern two bedroom apartment in Bastins Close in Park Gate currently on the market with Brook Estate Agents. The asking price is £20,000 less at £175,000 and the predicted monthly rental income is similar at £750. Ordinarily this would offer a yield of 5.14%. However with leasehold properties you must also factor in the ground rent and annual maintenance charges. In this case these total £1,441.40 Meaning that the net yield comes in at 4.31%.

Finally we looked at another two bedroom apartment in Duncan Road in Park Gate. This one is on the market for £169,950 and would provide a monthly rental of £750. After deducting the ground rent and maintenance charges the net yield is 4.54%.

Demand for two bedroom properties is still very high so all three would let very easily and achieve good monthly rents. Internal condition will play a part and my clients would have more cash available to make improvements if they spent less on the actual purchase of the property. They therefore have a decision to make as to which to go for as all three options give nice returns.

If you are looking to purchase an investment property, whether you’re a first time Landlord or an established one, and you would like some advice please call me on 01489 570011 or email me at james.hill@brooklettings.co.uk.