If you’re interested in becoming a landlord in Edinburgh, or in expanding your current Edinburgh property portfolio, knowing the best areas to buy a rental property is key to your success.

Ideally, a rental property will balance a reasonable purchase price with a strong rental yield to give you a good return on your investment. The lettings experts at ESPC Lettings can help advise you on what this looks like, to help ensure that you make a successful investment.

In our new series “How to Invest in Buy-to-Let Property”, we use the latest Citylets data and ESPC house price information, along with expertise from ESPC Lettings, to reveal the best areas in Edinburgh to invest in rental property.

First up: EH3, Edinburgh’s New Town.

Investing in EH3

EH3 is the postcode area for the New Town, one of the most sought-after places in Edinburgh to live.

The New Town is famous for its Georgian architecture, and is a UNESCO World Heritage site, offering it protected status from overdevelopment and conserving its stunning buildings, roads, parks and landmarks.

A stone’s throw from the city centre, EH3 offers residents the best that Edinburgh has to offer – so it’s unsurprising that so many people clamour to live here. Appealing to everyone from students and young professionals to families and downsizers, homes in this part of Edinburgh are always in high demand.

Rental yields in EH3

According to the latest Citylets data (Q3 2023), properties in EH3 report some of the highest rental yields in Edinburgh, making it a solid investment for prospective landlords.

One-bed properties in EH3 offer an average rental yield of 7.3%, while two-beds generate a 6.2% yield. Larger three-bedroom homes in the EH3 area offer a yield of 5.9% on average.

Reasons to invest in EH3

There are many good reasons to invest in a property in the EH3 area, and we’ve highlighted just a few below:

  • EH3 covers an area of Edinburgh that’s always popular, attracting tenants across various life stages and budgets.
  • Due to its popularity and prestige, you will likely let your property in EH3 very quickly and have a large pool of prospective tenants to choose from.
  • This affluent part of the city attracts a higher rental rate than some other areas, improving the rental yield.

Cons of investing in EH3

For balance, there are some points to consider before buying a property in EH3:

  • EH3 is an expensive area to purchase property in, so you will usually need a larger budget.
  • EH3 is predominantly made up of older buildings, so there is a higher likelihood of ongoing maintenance and repairs required, due to the age and significance of these buildings.
  • Properties inside the UNESCO World Heritage site, or buildings with a listed status, may be protected from certain developments or alterations, which may affect your plans for a rental property.

Property market data for EH3

According to the latest ESPC house price data (for August-October 2023), the average price for property in EH3 is £328,510.

A one-bedroom property in EH3 has an average price of £204,837, while a two-bed currently costs £353,816. Three-bedroom homes in EH3 cost, on average, £477,571.

Buyers bid an average of 104.5% of the Home Report valuation to successfully purchase a property in EH3.

Properties in EH3 take a median time of 22 days to go under offer.

Check out the latest ESPC House Price Report to keep up-to-date with the local property market.

Find out more

Are you ready to start your property investment journey?

Property investment should be taken as a long-term decision, so it’s very important that you consider all relevant factors before proceeding with a purchase. Take advice from the expert mortgage advisers at ESPC Mortgages to make sure you understand the financial obligations of a buy-to-let property, and speak to the ESPC Lettings team to find out everything you need to know about letting a property in Edinburgh, to prepare you to take the plunge into property investment.

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