How to Work Out Rental Yield

Posted by Market Financial Solutions on 8th February 2023 -

he current state of the economy has, understandably, got many landlords worried. Costs have been rising, limiting buy-to-let returns. But, better days may be on the horizon. We’ve seen promising economic signs suggesting inflation may have already peaked.

While currently sitting at 10.5%, it’s still much lower than the 10.9% recently predicted by the Bank of England. Andrew Bailey even expects costs to fall “quite rapidly” from the spring onwards.

Also, the latest GDP release showed growth in November, despite everything thrown at us. There’s no shortage of economic pessimism in the media, especially where the buy-to-let industry is concerned. But this negativity needs a wider perspective.

Much has been written about landlords abandoning their investments in the face of a brutal market. But second home and buy-to-let sales actually surged by 20% last year. And while rental yields may be under pressure, they can potentially offer investors a decent return when compared to other asset classes.

To help you wrap your head around what a “good” income could look like, this blog will break down how to work out rental yields. We’ll also highlight where you may get the best return for your money, and what you could do to boost your profits.

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