Should you invest in 1 or 2 bedroom properties?

Most investors assume that the more rooms you have, the more people you can rent your property to.  But this doesn’t always equate to the best yields or business model in buy-to-let investment.

When deciding on what size property to purchase for a buy-to-let investment, a number of factors need to be taken into account.  From studio apartments to houses in multiple occupation (HMOs), all property types will be in demand to varying degrees in different areas – and your budget will also come into it.

For example in the UK, New research by Howsy has found that yields for landlords are highest for two-bedroom properties in the UK. Looking at the average purchase price compared to rental income, the average yield for a two-bedroom buy-to-let in England is currently (as of February 2020) 4.8%.By comparison, one-bedroom properties take in an average yield of 4.1%, with 4.5% for a three-bed and 3.6% for a four-or-more bedroom home.

Regionally, the north of England achieves the highest yields overall, and the best yields for a two-bedroom property.

One of the most important concerns for any UK property investor is to provide what renters want in order to access a larger pool of potential tenants. It sounds simple, but it is often overlooked. By investing in properties that suit how people live their lives, you can cut down on the risk of void periods and enhance your long-term returns.

Nothing has impacted what people want more than the Coronavirus pandemic in recent years. It has given the entire property market a shake, and one of the most significant changes it has inspired is to make renters rethink what is most important to them. The increasing normality of flexible working, including portions of the week working from home, has impacted the type of properties that are proving to be the most popular. Home office space is more important than ever, making 2-bed apartments the most highly in demand among couples – particularly where both are working from home and the extra bedroom can be turned into a home office which makes life a lot easier for all involved.

It is worth noting that trends do change, and often from area to area.  This is why local knowledge and experience is crucial when deciding where to invest your money. Hurst & Wills provide rental projections and detailed Return on Investment (ROI) illustrations for both one and two bedrooms across their recommended projects, along with tailored advice on defining your personal property investment strategy,