One of our landlords asked if they should buy a 2 or a 3 bed terrace house in Hayle 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?
By answering this question will help you figure out which properties you should buy.
Terrace House Prices in Hayle
The average asking price of a 3 bedroom terrace house in Hayle is £214,000 today compared to £178,000 for a 2 bedroom terrace house.
Average Rental Income
The 3 bedroom property will achieve an average rental price of £825 per month, compared to £750 per month for a two bedroom property.
Rental Yield Comparison
This means that a 2 bedroom terrace house will give you a 5.06% yield. Whereas a 3 bedroom terrace house will give you a yield of 4.63%. Both are tracking slightly above the national average.
Capital Growth Comparison
In 2017 the average 2 bedroom terrace house price was £164,000. In 2020 its now £178,000, which is a percentage increase of 8.27%.
In 2017 the average 3 bedroom terrace house price was £169,000. In 2020 its now £214,000 which is a percentage increase of 26.5%.
Another point to consider is that both property types current ‘for sale’ prices in November 2020 are considerably higher than the yearly average. Therefore, this may or may not be sustainable, as the stamp duty holiday comes to an end early in 2021.
So which is the better option for you?
Therefore if its purely rental yield that you’re looking at then a 2 bedroom terrace house in Hayle will be your best option. However, a 3 bedroom terrace property based on the past 3 years trend, will provide a far higher capital growth.
That said, whilst there is a high demand for both types of properties in Hayle, 2 bedroom property demand is far higher. This is primarily due to the lower than average wages in this area.
So there you have it. Consider whether rental yield or capital growth are your primary objectives. Then look at the demand for the type of property you’re considering buying.
If you would like to chat about rental investment opportunities in the area, please contact us or pop in to see us at our offices. Because we’re a letting agency our opinions are purely from a rental opportunity perspective.
These figures are not provided to be relied on for property sale, purchase, mortgage investment or related purposes. We strongly recommend that you seek a professional valuation from a suitably qualified professional before making any decision whether to buy a property. You should also seek advice from a suitably qualified estate agent before determining the market sale price of any property you wish to sell.