The buy-to-let market in general at the moment is fantastic for owners, and if you are looking to buy, any area of the sector will provide you with a great return on your investment. However, when it comes to deciding what you want to buy, it all depends on the sort of return you are looking for.
For example, if you want a higher monthly rental income with a little less security in your month to month income, you might want to buy something pitched at young professionals.
Higher demand and their city centre locations will mean the sort of properties these tenants are after will present you with a high yield. The downside is that the demographic is very much mobile, and will often look to move on at the end of contracts, leaving you with the potential of a void period with no rent coming in, even if very short, between tenants.
For a lower-risk investment, you will want to look at family homes. Relatively speaking, compared to the house price, your rental income might be lower for family homes, but you will have far more security. Families tend to stay put for a number of years, so you will know that you have the chance of a secure income for an extended period.
If it were me, though, my investment advice would be to look towards the student market. There are always students, the entry price for buying properties is much lower, and you can pretty much guarantee the months that your home will be occupied. And because of the low price to purchase and the demand for these types of abode, you can rest assured that student lets are often some of the most prestigious in terms of rental yields.
Answered on Feb 24 2014,