How much should the rent be for a given house price?

Eternal1

00ec25 wrote: »

which does not answer the question - what is your background and why do you want to know?

What's it to you? It's none of your business why I'm asking the question.

00ec25 wrote: »

Before wasting time explaining basic economic theory, market forces, what is "yield", how do you calculate it, and how to interpret it, it would be good to know what you do and don't already understand or have read. Otherwise this thread is just another load of hot air.

I do - the answer is there isn't one, therefore, without accounting for a host of variables, these are 2 perfect answers:




given your question a year ago about interest I'm guessing school's out for the holidays

I'm not here for a crash course on economics mate, if I'm wasting your time then don't reply. Besides others have posted what they feel is a rough average.

Cheers.

G_M

Eternal1 wrote: »

What's it to you? It's none of your business why I'm asking the question.

It IS our business because YOU are asking US to help you.

I'm not here for a crash course on economics mate, if I'm wasting your time then don't reply. Besides others have posted what they feel is a rough average.

If you want help or advice, it is politic to be friendly, not rude.


It also makes sense to provide background to your question (ideally from the start, but if not, then in response to subsequent posts).


'nuf said - I'm off!

Eternal1

G_M wrote: »

If you want help or advice, it is politic to be friendly, not rude.


It also makes sense to provide background to your question (ideally from the start, but if not, then in response to subsequent posts).


'nuf said - I'm off!

G_M wrote: »

If you want help or advice, it is politic to be friendly, not rude.


It also makes sense to provide background to your question (ideally from the start, but if not, then in response to subsequent posts).


'nuf said - I'm off!

Background
I was born and raised in Chelmsford, I'm 26 and have 3 siblings. My favourite subjects at school were ICT and Design Technology but I never really saw myself becoming a builder or anything of that nature.

I did 3 A-levels, ICT, English and mathematics but I ended up changing mathematics for history, never really been great at maths. I got my first job when I was 16 working on the weekends as a labourer and hated every second of it, that was when I realised that I wanted an office based job. After I finished my A-Levels I went to uni and studied computer science, didn't do too well and ended up with a 2:2 but luckily I was able to find an entry level programming job pretty quickly.

I have £23,000 in savings which is invested in the stock market and a little bit of cryptocurrency and I don't have much investment experience, I just throw some money into the Vanguard LS every now and then. I currently rent a 1 bedroom flat for £700 a month which isn't too bad because the decor is nice and it's pretty close to where I work.

I don't drive at the moment but I'm looking at getting my licence in the next year or so, just so its easier getting around.

My hobbies are pretty average, I enjoy football, going out with friends and gaming. I'm currently in a relationship.

Reason for asking the question
Curiosity.

Now that you have this background information and I've provided a reason for my question, I hope this allows you to provide me with a more detailed and informative answer that you couldn't provide previously.

G_M

:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

sal_III

Eternal1 wrote: »

I believe the question marks in my posts make it pretty obvious I'm asking and not asserting. So yes, I'm asking out of naivety.

I was just asking if there was some rough ratio of rent to buy price. For example if a house costs £1million to buy obviously the rent isn't going to be £1,000 a month... Likewise a property that costs £250,000 isn't going to cost £5,000 a month.

I hope you understand what I'm trying to say.

A designer home in the sticks with a sizeable land plot might cost £1mil, but the demand for such property to rent is low, so you might struggle getting more than £2k.

On the other hand you can get a 4bed house for £200k in say Norwich and rent it out to students as HMO for 4x£400

theartfullodger

Take up drink, get a relationship going, spend some money and life a little.... ( IMHO....)



Best wishes to all

lookstraightahead

I definitely look at the value of a house when renting. I expect a landlord to cover their mortgage but if I think they are in fairytale land I don't rent from a greedy landlord. In my village properties stay vacant for months from wannabe landlords and they obviously lose out. But that's just me - there is obviously supply and demand to consider

eddddy

Eternal1 wrote: »

If a house costs £250,000 to buy, what would you expect the rent to be if you could rent it?

What about a £1million house etc? What is the average rent to buy price for houses and flats? Is it based on an average mortgage period of 25 years?

So a property which costs £2,500 a month should cost about £750,000 to buy?

It varies.

Some properties make good rental properties, so will achieve a higher yield (or rate of return).

Other properties don't make good rental properties, so achieve a lower yield.

Properties in some areas achieve a high yield, but low capital growth (e.g. currently in some northern towns)

Properties in other areas achieve a low yield, but high capital growth (e.g. currently in many parts of London)


Part of the job of being a landlord is to decide your investment goals, and find the best properties (and locations) to achieve those goals.

getmore4less

Gross yield 10% was the target to give a reasonable ROI after costs for the rental business.

With the low cost of borrowing and people prepared to make a loss on the rental business hoping long term capital appreciation will eventually make the profit has dropped the gross yields.