Investors can earn more than double the 8% yield the average landlord aims for by using data effectively, according to One & Only Pro.
The investment portal reports that if purchasers identify the best deals in the best buy-to-let locations, rather than looking at the return of the whole area, they could secure net yields well in excess of 20%.
Recent research carried out by One & Only Pro has identified the proportion of ‘diamond’ properties in the UK’s top 10 buy-to-let locations. The website categorises investment deals as ‘diamond’ if they receive a score of 10 on the platform.
The top score out of 10 means the opportunity has the highest possible chance of increasing in value. The scores are calculated by One & Only Pro’s unique algorithm, which considers a range of key factors, data and metrics.
Where can the most deals in the top 10 BTL hotspots be found?
According to the data, the UK’s top 10 buy-to-let investment hotspots are all located in the North of England, with Darlington in County Durham taking the top spot for the area with the highest proportion of diamond properties at 22%.
The top five list of locations with the highest proportion of diamond properties is made up by Bootle (21%) in Merseyside, Burnley (21%), Blackpool (19%), both in Lancashire, and Washington in County Durham (18%).
Burnley is the BTL hotspot with the cheapest opportunities
One & Only Pro’s study has also revealed the average price of the top 10 diamond properties in the selected areas, with Burnley being the most affordable diamond hotspot with an average price of just £37,000 for an investment opportunity which is highly likely to increase in value.
Other diamond hotspots with low average entry level prices include Bootle (£53,000), Darlington (£56,000), Grimsby (£56,000) in Lincolnshire and Sunderland (£63,000) in Tyne and Wear.
Liverpool investors can get up to 80% returns with right deal
When it comes to returns, the top performing area is Liverpool with an average Return on Cash Investment (ROCI) of 78.2% for one of the top 10 diamond properties in the Merseyside city. The ROCI is based on buying a property with the best mortgage deal.
Other standout performers for One & Only Pro’s average ROCI on diamond properties in the top 10 buy-to-let locations include Sunderland (68%), Washington (62%) and Burnley (61%). All of the top 10 register an average ROCI of over 35% for their top 10 diamond properties.
‘The real data shows buy-to-let is alive and kicking for savvy investors’
Henri Sant-Cassia, CEO of One & Only Pro said, “It’s shocking that people think buy-to-let is dead or is no longer a good investment as the real data shows something completely different.
“One & Only Pro can highlight the highest returning properties in the best buy-to-let hotspots in seconds.
“As we can see, investors in Liverpool can earn almost 80% Return on Investment. This figure includes the costs of buildings insurance, a gas safety check, service charges and ground rents and it is all calculated automatically on our website.
“With this kind of return, savvy investors could have earned their deposit back within two years. In many cases in the above locations, a property’s mortgage could be cleared from the returns within several years and you’ll then have full ownership over your investment.
“While some people have been delaying decisions due to Brexit, the shrewdest investors could already have earnt enough income to purchase their next property,” continues Sant-Cassia.
“Where else could you invest and earn returns like this? What’s more, you have the backing of bricks and mortar which will always have some kind of intrinsic value. As we know, stock investments could always get wiped out and be worth nothing.”
One & Only Pro is an AI-powered property investment website which aims to help investors of all levels to find the deal of a lifetime. It already hosts over 210,000 opportunities, almost 9,000 of which are Below Market Value, with almost 25,000 listings yielding higher than 7%.
|Town||% of diamond properties (DPs)||Average price of top 10 DPs||Average ROCI of top 10 DPs (%)|