A new study by insurance firm CIA Landlords has analysed rental prices of properties across the UK to discover possible revenue lines for landlords.
CIA’s study revealed that renting out rooms on an individual basis is usually the most profitable option for landlords, with Kingston-upon-Hull ranking as the most profitable location of all.
The average monthly rent of an entire three-bed property in Hull works out as £287 per room, while the average cost of renting a single room is over £400 more expensive - that is, £697 pcm.
CIA says this means landlords could earn up to £1,230 more per month by renting out rooms on an individual basis, adding up to an additional £14,700 per year.
Sunderland is the second most profitable location, with landlords able to earn an additional £9,612 per year by renting out individual rooms, followed by Nottingham where they can earn an extra £7,740 per year.
CIA reveals that landlords in London are better off renting out an entire property rather than individual rooms.
The average monthly cost of renting a three-bed in the capital works out as £1,693 per room, whereas the average cost of renting a single room in a property is just £972 per month. This means landlords could earn on average an extra £2,163 per month by choosing to let their entire property.
After London, the only other UK cities where renting out an entire property is the most profitable rental strategy for landlords are Edinburgh, Aberdeen and Manchester.
Meanwhile Stoke-on-Trent is the cheapest city in the UK to rent a whole three-bed property: the average is £843 per month.
Landlords can see the full research here.
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I'm sure they are right, but I won't be doing so
My Rents are very reasonable my Flats are £4-6 hundred pm below & houses £1-1.6k pm below. I cannot increase rents unless I change all my Tenants because I know they can’t afford it.
It doesn’t stop the Government & Council’s targeting us driving up our costs, they are all licensed some a number of times the costs of which I had absorb.
Why doesn’t the Council’s earn some money instead of being free loaders all the time. Obviously they are not doing their own job, leaves not swept rotting down into mud & just left there, drains & gulley’s blocked some haven’t worked for years by the thousand in the Capital, causing ponding / flooding the Road Surfaces to cracking up & massive pot holes, everyone knows this incl’ Council but just look and ignore, they are so ignorant they say it’s to save money.
Kinda obvious...
Government complaining about higher rents are they not a main beneficiary of higher rents, the higher the rental income the more income tax you pay and haven’t they just increase that as well, so square that one.
When a home owner buys that annual income tax is lost (benefit claimants won’t be buying). When a landlord buys not alone is SD higher but the money stream continues on every penny and the Government knows your income from your Registered Deposit and your Tenancy Agreement’s for licensing and your Tenants have to produce it to claim all sorts.
max rent for a 1 bed in my area is c 675 pw
3-4 bed 5-6k+ pw
Bit of a no brainer innit ??
In the main a HMO will earn more money, but it is a lot more work and often you get involved in silly disputes in the house. That said when I did have some HMO's that worked well they were very rewarding financially.
I would think very long and hard before making this choice again though.
HMO’s is something I didn’t want as I don’t let rooms, all those extra rules and costs loaded onto me for what ?.
It's really quite irreponsible and inappropriate to provide this kind of information on how landlords can get more rental income WITHOUT mentioning the downsides to renting out on a room by room basis.
This has a number of implications including being a breach of mortgage conditions (assuming the landlords has one), a breach of insurance T & Cs, potentially a breach of the lease if it is an apartment, and not to mention potentially creating an HMO that will require safety and compiance upgrades and possibly licensing. No mention of this being a "bills included" strategy even though the media is filled with stories of soaring energy costs!
Unfortunately, this article just plays into the narrative of the "get rich quick" property gurus who encourage inexperienced people to undertake Rent to Rent arrangements by letting a whole dwelling and then sub-letting the rooms for a greater profit.
It all sounds great in theory and the theoretical numbers looks great on paper - but reality is altogether different and many people - landlords, tenants, and Rent to Renters lose money in these kind of arrangements imho.
Anything that looks too good to be true in property generally turns out to be. Caveat emptor as always.
Vanessa, is right they don’t count the extra costs of Compliance and Bills.
Bills is to simply a word if you let the Property solely as opposed to rooms on one Contract then the Renter’s pay the Council tax.
There’s a lot of good landlords on here that are being totally wronged, bullied and robbed, no wonder Dani is spitting bullets.
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