What are some good areas to invest in with high rental yields.

HappyMJ

slowpoke_rodriguez wrote: »

For %age yield, It's irrelevant what the property is worth now; it is how much it cost you that matters. How much was it?
Obviously, you could improve your return by ditching the letting agent...

Sorry but that's not true. Let's say I put down £20,000 of my own money (that was the 25% deposit) for my house many years ago (15 to be exact) and I currently rent it out for £7,200 per year so that's makes a 36% gross return on investment. That's not realistic in today's market.

The house I have is now worth around £145,000 so it really is a 5% gross return. My equity in the property is now £65,000 having taken my deposit back out of the property.

The net return is affected by the letting agent fees (£500/year), interest (£4,000/year), maintenance costs (£2,000/year) and insurance (£350/year). My net return excluding any capital gain is tiny at about a quarter of one percent 0.25% per year. I make about £30 profit per month from it.