Date Published 02 August 2022
As an aspiring landlord, you will no doubt have heard the words rental yields and capital gain, but what do these terms actually mean, and how do they relate to Milton Keynes?
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Put simply, a yield is the annual return you can expect to generate on the rental property you own through the rental income you receive. In order to calculate the rental yield, you need to be aware of the sale price or current value of your property and the rent you expect to receive for the year. The potential rental yield on a property is then estimated in the following way: you take the annual rent of a property, divide it by the home's value and then multiply by 100.
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Capital gain, sometimes known as capital appreciation or capital growth, is also a key consideration for landlords. It is, in essence, a self-descriptive term - how much will your home increase in capital value over time? And how much could you get for your rental property if you ever come to sell in the future?
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On a basic level, landlords investing for the short-term should consider locations that could deliver high rental yields, while landlords with a long-term view may want to prioritise regions or cities with historical capital gains and steadily rising house prices.
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Yields fluctuate from estate to estate. In Central Milton Keynes, the average yield is 5% (before the service charge is deducted). Some areas see investors making significant gains, so specific location and property choice make a big difference when looking to invest in Milton Keynes.
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Milton Keynes rental market is huge and there is always a demand for property. However, a high level of properties at a high market price in Milton Keynes means that buy to let property in the area must work hard to return a profit. For this reason, a good rental yield in Milton Keynes is between 5-6%.
