Nottingham Rental Yields – A Smart Move?
While investing in the buy to let market can provide great income, there is a need to take this market very seriously. Investing in property features a huge financial outlay and a lot of responsibility, so it is important that you undertake a strong level of research. You should consider the cost of buying the property, the expected rents and what sort of rental yield you can expect to receive from your property.
It is easy to see why many people would hold an interest in the Nottingham buy to let market. However, while your instincts may suggest that Nottingham is a good place to buy property to let, you should always carry out research into the area before you spend any time or money on the product.
You can invest in Nottingham city centre
The NG1 postcode area covers most of Nottingham city centre. As of October 2017, a leading online property specialist listed the average value of property in the NG1 postcode area as £153,497 while the average price paid for NG1 property in the past 12 months stands at £166,694.
With respect to expected rental yield, a one bedroom property in NG1 offers a 7.24% rental yield, a two bedroom property provides an expected rental yield of 6.13% while there is a return of 4.49% for a three bedroom property. For a four or five bedroom property, you can expect a return of 3.71% and 2.22% respectively.
Given that many investment specialists suggest that a return of over 4% is worth considering, there are a number of property types in the NG1 postcode area that are worth considering. The average property rents in NG1 stands at £1,156 per calendar month (PCM) while the average rent for a one and two bedroom property stands at £685 and £864 respectively.
NG2 postcode area offers benefits
Some of the areas featured in the NG2 postcode area include the city centre of Nottingham, Colwick Park, Sneinton, The Meadows and West Bridgford. In October 2017, the average value of property in NG2 is listed as £256,077 while the average price paid in the past 12 months stands at £265,513.
With a one bedroom property in NG2, you can expect a return of 7.23% while with a two bedroom property, there is an expected rental yield of 5.43%. A three bedroom property provides an expected rental yield of 4.72% and there is a return of 2.59% for a four bedroom property while the five bedroom property option offers a return of 2.2%.
Given that the average price of property in NG2 is higher than NG1, it is no surprise that some of the returns are lower however, the returns for a one and two bedroom property are well worth pursuing. The average rents for the NG2 postcode area stands at £1,130 PCM with the average rents for one and two bedrooms coming in at £595 and £874 respectively.
Another option to consider in the Nottingham area is the NG3 postcode area and this represents Carlton, Sneinton, St Ann’s and Mapperley. The average value, as of October 2017, stands at £180,923 for NG3 and the average price paid for property in the past 12 months is £175,938.
The return for a one bedroom property in NG3 stands at 5.21% while the highest return in the area is the 5.54% for a two bedroom property. For a three, four and five bedroom property in the NG3 postcode area, the expected rental yields are 4.88%, 4.33% and 2.93% respectively.
The NG3 postcode area has an average rental fee of £795 PCM, the average rent for a one bedroom property is £478 and for a two bedroom property, the average rent per calendar month is £600.
Given that there are some property types in the heart of Nottingham offering a return of more than 7%, it would be correct to say that Nottingham offers some great investment opportunities.
If you’re thinking of investing in Nottingham then please give us a call on 0115 824 8333 and we’d be happy to assist you in maximising your investment returns.