Finance expert gives tips on increasing buy-to-let yields

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Richard Dyson, Personal Finance Editor of the Daily Telegraph, gave a detailed example of how to make a high yield on buy-to-let residential property investing in an August 2016.

Dyson looked at an investment by Ryan Windsor, a property entrepreneur with a large property portfolio who is in the process of buying a four-bedroom home for £120,000 in Norfolk. After spending an estimated £20,000 on refurbishments, it will have six bedrooms, a sitting room, two bathrooms and three toilets. The six bedrooms will be let for between £75 and £150 a week depending on size.

The total annual rental income if fully occupied is £28,600, which on the £140,000 spent on the property will give a yield of over 20%, thus representing a good business investment.

Windsor specialises in letting rooms for factory workers and skilled labourers. He also works with the local council, which takes over several of his properties on a five-year contract at an agreed rent; one that is below the current market value. This arrangement lowers his financial risk by providing full occupancy and helps the council in its housing needs.

Dyson predicted that the recent cut in interest rates by the Bank of England could result in low on commercial mortgage interest, and this will make property investment more attractive. He warned potential investors that, with high tenancy turnover, buy-to-let investments are labour intensive.

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