Rental Income – Migrant Workers Best
New research from the National Landlords Association reveals that migrant workers, and not professional executives, provide the best rental income.
The NLA says it study shows that average rental income on property rented by companies or executives was just 4.9 per cent—the lowest of any tenant type.
The main reason for this was that the properties typically require significant upfront investment to match the high-spec expectations of the tenants.
The NLA, found that the tenants generating higher than the average rental yield of 5.6 per cent included migrant workers (6.5 per cent), students (5.9 per cent) and retirees (5.8 per cent).
These types of tenants are actually easier to find than executives, who accounted for just one in 50 of all tenants.
Migrant workers, students and retired people accounted for seven per cent, 14 per cent and 11 per cent of tenants respectively.
The NLA also found that the big detached house—the kind of favoured by richer tenants and families—was the least profitable type of property, generating an average rental yield of just 5.4 per cent.
By contrast, HMOs and the humble bungalow were the most profitable, generating an average rental yield of 6.5 per cent and 6.2 per cent respectively.
NLA chief executive Richard Lambert says: “The private rented sector has grown because there is an alignment of interests between landlords and tenants. There is high demand for rented property from particular groups of people — migrant workers, students, and retirees — and these are precisely the people who offer landlords the best return on their investment. They are also the people who will bear the brunt of government policies which end up pushing landlords out of the market.”