Put simply, in the world of buy-to-let property, your rental yield is your return on investment.
This is the clearest indicator of what you can expect to earn from an investment, making it one of the most important factors to consider.
Rental yields can vary significantly depending on things like the quality of the property, the range of facilities available to residents (if it’s part of a larger development) and, of course, the location.
What Is a Good Rental Yield?
So, what is a good rental yield, and what sort of rental income can you expect from a UK buy-to-let property in 2023?
A solid rental yield typically sits at around 6%, which is a return that can be expected from most central city districts in the UK.
According to the most recent house price index, the average UK rental yield is 5.08%, so if your property is hitting the 6% mark, then it’s generating a solid return.
Depending on the quality, location, residential facilities, and investment type, however, higher rental yields are more than achievable in key UK cities.
The brand new Rice Works Liverpool development, for instance, has the potential to generate returns of up to 15% thanks to its premium location along the city’s waterfront and the C1 planning consent that enables each apartment to be rented as a short-term let – another highly lucrative investment strategy.