Sheffield’s Hidden Gems: How to get a high rental yield without risk or compromise

Sheffield is a city in the north of England, known for its industrial heritage, culture, and green spaces. It is also a popular destination for investors, due to its relatively affordable property prices and strong rental yields, which average at 4.2% as of May 2023. 

This is higher than the national average which sits at 3.6%. Not to mention, “the city’s gross value added (GVA) has increased by 60% since 1997, and the economy has grown steadily at around 5% annually”, according to Property Data.

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Sheffield’s industrial heritage began back in the 17th century, which paved the way for the development of the cutlery industry. The city then became the centre for the production of steel and metal goods. 

The Industrial Revolution transformed Sheffield into a thriving metropolis. The city’s factories produced everything from swords and knives to bicycles and locomotives. Sheffield became known as the “Steel City” and was one of the most important industrial centres in the world.

Sheffield is also home to a number of other museums and galleries that tell the story of the city’s history and culture. The Sheffield Industrial Museum, the Sheffield Art Gallery and Museum, and the Crucible Theatre all offer fascinating insights into the city’s past and present.

Sheffield has a proud sporting tradition. The city is home to two Premier League football clubs, Sheffield United and Sheffield Wednesday. Sheffield is also home to the world-famous Crucible Theatre, which hosts the annual World Snooker Championship.

Sheffield is a vibrant and cosmopolitan city with a lot to offer its residents and visitors. The city has a rich history, a strong economy, and a thriving cultural scene. Sheffield is a great place to live, work, and raise a family.

But, this begs the question of what the benefits are of investing in Sheffield and how to do so without compromising your investment. 

Benefits of investing in property in Sheffield

It is wise to always invest in an area that has a lot to offer its residents, and Sheffield does just that! 

Sheffield is one of the greenest cities in the UK and is one of the few cities in Europe that owns a national park, boasting 61% green space. This is always a massive advantage for any property investors. Sheffield is also deemed 62.8% cheaper in rent than London as of March of this year. This means that there will be a lot of opportunities to invest in property, and as we saw earlier, your rental yield will be higher than most places. 

In addition to this, Sheffield’s economy is worth a whopping £11.3 billion, so it is the perfect place for job-seekers and entrepreneurs. 

Sheffield offers the perfect hybrid of village and metropolitan living with many galleries, theatres, and museums with its beautiful social setting. For those musos, there is the perfect nightlife, too. 

What’s more, is that Sheffield is in phase two of the £470m Heart of the City scheme in which the city centre is undergoing massive transformation. Alongside this, another £300m is being spent on the West Bar scheme which is said to create 8,000 new jobs in the future. 

Sheffield’s rental market

In a Zoopla report from December 2022, it was revealed that rental prices had surged by 12.1% compared to the previous year. The supply of high-quality rental properties has failed to keep pace with the escalating demand, resulting in a notable rise in rent rates. This dynamic creates promising investment prospects.

Investors have the opportunity to cater to diverse demographic groups in the thriving Sheffield rental market. Firstly, Sheffield boasts a substantial population of young professionals attracted by the city’s robust job market, social amenities, and affordability. This demographic makes buy-to-let investments particularly attractive, with areas like Kelham Island and Hillsborough emerging as hotspots for young professionals.

Since 2000, the number of households residing in private rented accommodation has more than doubled, according to Statista.com. Families seeking quality education and family-friendly neighbourhoods are increasingly turning to Sheffield’s rental market.

Finally, the student population, primarily from the University of Sheffield and Sheffield Hallam University, remains a lucrative target for investors. With over 60,000 students collectively, the demand for rental properties during their academic tenure is substantial. Areas like Crookes are highly sought after by students, ensuring swift property turnover. Investors may also diversify their portfolios by considering purpose-built student accommodation. These diverse demographics collectively form the bedrock of Sheffield’s thriving rental market.

The main reasons to invest in property in Sheffield are: 

• Affordability: Sheffield is one of the most affordable cities in the UK to invest in property. The average house price in Sheffield is £240,804, compared to the UK average of £283,476.
• Strong demand for rental properties: Sheffield has a large student population and a thriving economy, which means that there is a strong demand for rental properties. This means that investors are more likely to find tenants for their properties and can charge higher rents.
• Regeneration: Sheffield is undergoing a significant period of regeneration, with a number of new developments and infrastructure projects underway. This will most definitely boost the city’s economy and rental market. 

Student rental market

The student rental market in Sheffield in 2023 is fully thriving and is a strong one, resulting in demand exceeding supply. Sheffield is home to two major universities, Sheffield University and Hallam University, with 50,000 students between them. This leaves ample opportunity for landlords and property investors to receive a rental yield of as high as 7% for student housing. 

Sheffield is also an extremely affordable city to live in which entices students from all over to join! Not to mention the nightlife that is a given in any student-rife city. 

Trends for the student rental market

Student co-living is a relatively new trend in the student rental market. Co-living spaces offer students the opportunity to live in shared apartments with other students, which can be a more affordable and social option than traditional student accommodation. The idea of co-living is that people have access to a community and a more sustainable way of living. 

There is also an increase in demand for purpose-built student accommodation (PBSA) which is designed to offer an array of amenities, including study spaces, laundry facilities, and onsite security. This trend offers a safer way of living compared to traditional student living. 

This offers an exciting time for landlords who want to invest in property in Sheffield, especially within the student rental market. 

Getting a high rental yield without risk for property in Sheffield

You now know that investing in Sheffield is a great opportunity for you as a landlord, but how can you make sure that you still get a high rental yield without compromising on your investment?  

Invest in a good location

The first thing that you should ensure is that you invest in a good location in Sheffield. Do your research and visit different places if you have to. Usually, the most popular areas for property investments are city centres, and more specifically in Sheffield, Ecclesall Road, and Kelham Island. These areas are in high demand from tenants and are likely to experience future growth.

Choose the right type of property

Next, you would need to choose the right type of property for you. Apartments tend to have higher rental yields than houses, but they are also more risky. If you are looking for a long-term investment, it may be better to invest in a house. But, this will completely depend on your budget and property investment goals. 

Invest in a property that is in good condition 

Tenants are more likely to rent a property that is in good condition and has all the necessary amenities. This will help you to reduce the risk of void periods and attract higher rents. Tenants also want to make sure that their landlords look after their properties. 

Market your property to the right tenants

If you are targeting students, market your property to university students’ unions and student accommodation websites. If you are targeting professionals, market your property to local businesses and employment agencies. Again, this will depend on your own personal property investment goals and is something you will need to decide upon before purchasing a property. 

Offer competitive rent prices 

Make sure to research the rental market in the area of Sheffield that you want to invest in to ensure that you are offering competitive rent prices. You will need to find the right amount that you will gain a good rental yield from, but also one that is not overly expensive. 

Provide excellent customer service 

Be responsive to tenants’ inquiries and repairs. This will help to keep your tenants happy and encourage them to renew their leases. As we mentioned earlier, tenants want to know that landlords look after their properties and that they are easily reachable if there is an emergency. 

History of high rental yield

It will also be worth looking at the property’s history of rental yield. Investing in a property that has a history of high rental yield will help you as a landlord. You can find this information by looking at past rental prices for similar properties in the area.

Short-term tenants

Another option that you have as a landlord is to rent out your property on a short-term basis. These types of tenants could include business travellers and tourists who are usually more willing to pay higher rental rates. 

Offer services

Offering additional services to your tenants, such as a laundry service or cleaning service would also massively appeal to most people. They will be willing to pay a little more for these extra bits added to their monthly rent.  

It is important to note that there is no such thing as a guaranteed high rental yield but by following the tips above, you can increase your chances of getting a high rental yield without risk or compromise! 

Investing in property in Sheffield can be a great way to generate income and build wealth. The city offers affordable property prices, high rental yields, and a strong demand for rental properties. However, as an investor, you should carefully consider your investment goals and risk tolerance before making any investment decisions.