Gross returns - the
rent received before taking account of the cost of letting - such
as management fees, maintenance, service charges ground rents and
insurance varies between 7% and 10%. This can be less for very
expensive properties.
The average rental
return in Britain today hovers around the 10% mark, and capital
appreciation is likely to match, if not exceed, inflation for the
foreseeable future.
As a rule of thumb,
the gross rents should be between 130% and 150% of the monthly
mortgage payments.