Why is Sheffield a great city to invest in a residential buy-to-let?

There are many cities and several factors to consider when purchasing a buy to let. Sheffield is a top contender for several reasons, and not just because it’s the home of Football and the famous Hendersons Relish! Let us weigh up the risks and rewards, yields and tenant demand in Sheffield, and why it’s a great city to invest in a buy to let.

Risk and reward are something any landlord should consider when making an investment, why take the risk if there will be no reward? Sheffield is considered a low-medium risk with its affordable properties, alongside stable tenant standards. This is in comparison to cities such as Leeds and Manchester, where reward may be higher with larger rental income and growth of popularity in the cities, but at an increased risk, with higher property prices and a greater tenant turnover reducing security for landlords. On the other hand, there is a city such as London which is considered a safe investment with high tenant demand, but at a much higher cost, resulting in it being a low risk but also low reward location. Sheffield is considered to be a good middle ground for risk and reward. Whilst it may not be the biggest city, it has a steady growth that is driven by regeneration and investment, with projects to improve areas such as the city centre and Kelham Island creating great capital growth potential.

Sheffield would also be considered an excellent location to join the property ladder. Locally, properties have more affordable prices, lower deposits and a better price to rent ratio, which means you get more for your money. This of course is said with the intention that a property lets efficiently once it is purchased, good interior quality is a high priority to tenants! A trusted Sheffield estate agent with knowledge of the market and area who can guide you is really worth considering. Dove, established in Sheffield for over 25 years, are on hand to assist with your rental property, contact our team of experts today.

Yields may seem more complex, however they are another important factor to think about when making an investment in a buy to let property. In simple terms, a yield is a return on an investment expressed in a percentage form. A yield coincides with risk and reward as this would be need to be considered when deciding if a property is worth the risk.

For a long-term investment such as a buy-to-let, Sheffield is a great choice for a stable yield on a year-by-year basis. It may not create the highest return every year in comparison to cities like Manchester and Leeds however it is more consistent in providing an above average yield in years where Manchester and Leeds don’t provide as expected. Sheffield overall is considered to have good yields, low entry cost, lower volatility and slower but steadier growth whereas Manchester relies on continued growth, Leeds relies on continued expansion, and London relies on continued appreciation. Typical yields for each of the cities would look something like this.

For long-term landlords looking for an investment that is consistent in its return, Sheffield is the ideal location.

When considering an investment, a key factor to consider is the demand for what you are investing in. For residential properties in Sheffield, your target market would generally be families and young professionals, however their requirements for a property may lie in different places.

For families, it is important to contemplate the schools within the area, the safety, and the greenery in its surroundings. The location selected may also help to be decided by budget. Within a more affordable budget for both the landlord purchasing the property and the tenants who are looking to rent, there are areas such as Walkley and Hillsborough which are well known for their strong community feel, good transport and school selection. Others areas to consider are Meersbrook, Woodseats and Norton which are well known for its good schools and family vibe. One thing that Sheffield will never be short of is greenery which covers 61% of the whole city; it has a variation of parks, the peak district on the doorstep and is known to be a hub for walking, cycling and climbing. This is strong quality for a family location. If you are looking with a higher end budget to invest, there are areas such as Dore and Totley known to have outstanding schools, a village like feel, and a safe and strong community. There would also be Fulwood, Crookes and Crosspool which have slightly more affordable house and rent prices compared to Dore and Totley, however they still have strong reputation for both primary and secondary schools, plenty of greenery and a friendly feel throughout. Finally, Ecclesall is a great family location as there is strong demand in this area with its excellent schools and amenities on the doorstep.

The main point to interpret from all of these locations, is that there is a wide variation across Sheffield which give options to both landlords and tenants, and that is just some of them! The flexibility in the options mean it is almost certain you will find what's right for you including, an affordable buying price, a reasonable return and a strong set of tenants.

For young professionals, it is important to consider lifestyle and amenities, affordability and the transport links nearby. A contender in location, would be Kelham Island which is an upcoming location transformed from what was an Industrial area become a trendy urban hub. It is high in tenant demand with its craft breweries, streetfood markets and creative workspaces. The Heart of the City is the ideal location for young professionals working in the centre, but also comes with modern apartments and new builds and is surrounded by transport for wherever you want to go. Finally, Crookes and Broomhill are known for their strong local vibe, good transport links and plenty of amenities. It is also a place that many start off as students, but decide to continue in as a young professional.

It is found that around 40% of students stay in Sheffield after graduating, this is one of the highest ranking cities in the UK. If that doesn’t tell you how strong the lifestyle appeal is, I’m not sure what does! If the city appeals to this many potential tenants, think about the possibilites as a landlord. Sheffield is a city of oppurtunity from all angles of the market, but is not without the flexibility for all ranges of requirements and budgets. All of the factors listed above are just a few of the reasons as to why Sheffield is a great city to invest in a buy-to-let, but believe me, it isn’t short of others! If this is something you are considering, and would like to discuss anything further or in more depth, don’t hesitate to contact us here at Dove and any member of our team would be more than happy to talk to you.