Which 2 or 3 bed house should I buy in the Teddington area...?

One of my landlords asked if they should buy a two or three bedroom house to rent out to tenants. The first question I asked them was what are they looking for from the investment - capital growth in the property or straight forward yield?  Answering this question will help you figure out which properties you should buy...

The average asking price of a two bedroom house in Teddington is £695,000, but a bargain(!) can be picked up for around £550,000.  Three beds average £749,950 but start from around £585,000 for a semi or terrace nearer to Fulwell.  The three bed semi achieves an average rental price of £2,495 per month compared to £1,550 per month for a two bed.

That’s a yield of 3.99% for the two bed against 3.44% for the three bedroom house. So, surely, the two bed semi is the better bet?  Well it does offer a better rate of return, but the three bed, appealing to families who may stay longer, could well have less void periods and may be easier to sell in the future.

Here's the piccy of the day - made me smile at least! :o)

Rebecca Smith