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Buy to let can be lucrative, but only if you target properties in the right areas. As any experienced landlord knows, rental yield has to be above a certain margin or the business will not be profitable.
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If you are familiar with your local area, you may already know there is a high demand for rental properties, but if you are new to the buy to let game, which cities offer the best overall returns?
It’s Better Up North
According to research carried out by a buy to let lending website, Manchester is number one for profitability, but London offers landlords the best return for their cash.
The average rental yield in Manchester over the last five years is an impressive 6.8%. Outer London and Coventry all offer excellent returns of around 5.8%, but when the researchers looked at capital gains, they found that central London ranked the highest, with buyers seeing on average 11% returns on their property investments. This is perhaps not all that surprising given the growth of the London property market in recent years.
When researchers combined the figures and looked at overall return of investment, east London came out on top, with a ROI of 17.8%.
Which Area is the Worst Performing?
Sunderland in the north east has the worst performance record, with a ROI of only 3.2%.
