One of our landlords asked if they should buy a 3 or 2 bed semi detached property to rent out to tenants.
The average asking price of a 3 bed semi in Bexley is £373,000 today compared to £303,700 for a 2 bed semi. The 3 bed semi achieves an average rental price of £1,430 per month compared to £1,150 per month for a two bed semi.
That’s a yield of 4.5% for the 2 bed against 4.6% for the 3 bed. So they are very similar but you might find that a 3 bed semi is slightly easier to rent out (less void periods) and will be easier to sell in the future.
What about capital growth? According to the Halifax Price Index, Bexley has seen an increase in property values of 51.97% between 2009 and 2014. This means that, in 2009, the average price of a 3 bedroom semi would have been £245,440 and the 2 bed semi £199,840.
Therefore, the initial extra investment of £45,600 for the 3 bed semi, gives you an extra £23,000 in capital growth and let’s not forget, that according to recent figures, you could also be seeing an extra £3,360 per annum in rent.
If you would like some advice with your potential investment, please call, email or come and see us in our offices.
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