Which semi-detached house should I buy in York? One of our landlords asked if they should buy a 3 or 2 bed semi-detached property to rent out to tenants. The first question I asked them was what are they looking for from the investment – capital growth in the property or a great yield?
Answering this question will help you figure out which properties you should buy… The average asking price of a 3-bed semi in York is £260,579 today compared to £211,174 for a 2-bed semi. The 3 bed semi achieves an average rental price of £1,005 per month compared to £790 per month for a two-bed semi.
That’s a yield of 4.49% for the 2 bed against 4.62% for the 3 bed. So surely, the 3-bed semi is, ever so slightly, the better bet?
While the 3 bed does offer a better rate of return, the 2-bed semi is slightly easier to rent out (meaning fewer void periods) and will be easier to sell in the future.
It really comes down to getting the higher ‘Gross’ yield and taking a slightly higher risk on voids. That being said, let’s not forget the level of capital appreciation that York semi-detached properties provide.
According to Zoopla, across a datascrape of 7,012 sales over the last five years, semi-detached properties in York have increased in value by approximately 18%. In essence, a semi-detached house bought for £180,000 five years ago, would now be worth approximately £212,400. This creates an opportunity all around for both existing landlords and owner occupiers.
For landlords, there is the opportunity, to release additional equity to put towards another buy to let and increase their portfolio. For owner occupiers, who would likely be on a capital repayment mortgage (and consequently, would have paid more of their mortgage down), there is a great opportunity to pull out extra equity to start their property investment journey.
If you would like more information as ever, drop me line.