While some landlords are exiting the property sector due to current conditions, the rental market offers potentially lucrative investment opportunities if you know where to look.
For instance, landlords need to understand where people want to rent properties. If you cater to young professionals and students, you’ll want to purchase properties in the city centre or near university campuses.
On the same topic, landlords should consider rental markets in cities with good economies and graduate retention rates, as these are areas where people are more likely to look for accommodation. For example, Liverpool has a strong graduate retention rate from its major universities and is also the fastest-growing economy in the UK (as per The Data City).
By owning a property in these areas, you’ll be more likely to see high tenant demand and limit your chances of going through a substantial void period, which is much better for your long-term investment goals.
It also helps if you purchase properties in areas with strong rental yields. If we take Liverpool as an example, the average rental yield is 7.44%, while the average property price is around £129,000 (both according to Zoopla). If rental growth is set to thrive for the next few years, you may see those yields grow in the near future.
It is also worth mentioning that Liverpool, as part of the North West, is expected to see 20.2% capital growth over the next few years. As such, if you’re looking to buy property in the area, you’ll see the value of your property rise, as well as the potential rental yields.
With property prices stagnating (per the latest Halifax HPI), if you buy property in 2024, you may be able to maximise those capital gains and rental yields.
