May 20, 2021

Property is generally a great investment option as it can generate both ongoing rental income as well as being a good long-term investment if the property value increases over time. In Edinburgh in particular, the demand for buy-to-let properties is strong with rental yields of over 5%. McDougall McQueen are seeing a number of new investor clients realising opportunities in this area.

If you are considering investing in property, then there are 3 key investment strategies to contemplate when it comes to growing your wealth:

1.Rental income – remember  this needs to cover mortgage repayment costs, council tax, insurance and utility costs, management (letting agent) fees and maintenance costs. A prudent Landlord will work on at least 1 month void period per year, sometimes more in certain markets.

2.Flipping – a short-term plan that involves buying a property, increasing its value (generally through renovation) and selling it on – one can add value in several ways.

3.Buy-refurbish-rent – like flipping, but the investor holds on to the property and rents it out for a period of time, often refinancing to release funds for further investment once value has been added via refurbishment to the initial property.

Edinburgh has a strong letting market – from local residents and large corporates, to students to tourists / holiday lets – and in a recent report the ESPC has identified the best areas for buy-to-let properties in Edinburgh based on rental yields, to help investors maximise income on a buy-to-let investment.

  • EH17 – Gilmerton, Moredun and Mortonhall. Two bedroom properties in EH17 achieved an average gross rental yield of 6.1% in the fourth quarter of 2020.
  • EH16 – Liberton and the surrounding areas. Between October and December 2020, the average rental yield for one bedroom properties in EH16 was 5.5% while it was 5.2% for two bedroom properties and 5.4% for three bedroom properties.
  • EH8 – Newington and Canongate. In the last three months of 2020, three bedroom properties in this area achieved an average gross rental yield of 6.1%. Two bedroom properties achieved 5.2% while one bedroom homes achieved 4.8%.
  • EH13 – Colinton, Oxgangs and Bonaly. From October to December 2020, the average rental yield for two bedroom properties in the EH13 area was 5.6%.
  • EH1 – The Old Town. In the last quarter of 2020, one bedroom and two bedroom properties in EH1 achieved rental yields of 5.5% and 4.4%, respectively.
  • EH12 – Haymarket, Murrayfield, Corstorphine and the Gyle. One bedroom and two bedroom properties in this area achieved average rental yields of 5.5% and 5.2% respectively, in the last three months of 2020.

Whatever strategy you look at, and whatever area you invest in, making a success of property investment will come down to having the right experts behind you. At McDougall McQueen we work with a number of investor clients and offer a full end-to-end solution for rental investors – negotiating the property investments from start to finish, and working with specialist IFAs and mortgage brokers who can also offer tailored advice.

If you are looking for advice to enter the property investment market in Edinburgh then please get in touch.