Driving yields: What brings in the most money for landlords?

Driving yields: What brings in the most money for landlords?

Returns are, it almost goes without saying, the biggest measurement of success for any landlord investing in the property market. However, while it is now easier to make good returns than at any other time in history, there are obviously some who do so more successfully than others. So what are the real drivers behind fantastic returns in the buy-to-let sector?

According to the latest report from Countrywide, it is those landlords who put their focus on the young, mobile tenants who are more likely to see high yields for their properties. 

Its study looked into the types of rental home that bring in the best returns for landlords, and it discovered that furnished flats and apartments in city centres, which are most often populated by young professionals, are those which attract the highest premiums. 

On average, a family home that comes furnished will be able to attract a 2.1 per cent premium. However, because city centres are more often than not home to young aspirational graduates who do not have their own, flats in these areas which come furnished are able to attract a premium of some 8.1 per cent.

"Whether you are a first time landlord or a seasoned investor it is important to understand what tenants are looking for. This not only helps to minimise void periods but also assists in achieving the highest return from the rental property," said Nick Dunning, Countrywide's commercial director. 

So why is it the case that these properties are so popular with tenants? It's actually quite straightforward. Young graduates are always mobile, ready to move to wherever they can find work and are prepared to pay a premium for the chance to move into a property that comes ready to live in, reducing their stress greatly. 

"The higher percentage of younger people living in city centres and the turnover of tenants mean tenants are less likely to have their own furniture and are keen to avoid the expense of moving it," Mr Dunning added.