Where do you get the highest rental yields in Edinburgh?

Edinburgh, the capital of Scotland, is not just famous for its picturesque landscapes and rich history but also as a thriving rental market. The city’s diverse culture, prestigious universities, and flourishing job market make it a magnet for students, professionals, and tourists alike. 

For property investors, Edinburgh offers a lucrative opportunity, especially if you know where to look for the highest rental yields. Here, we look into the city’s property landscape to uncover where you can get the best bang for your buck.

Why invest in Edinburgh?

The property market in Edinburgh can be summarised into houses being in high demand and offering high property value. It has a very strong rental market, drawing in large numbers of students, tourists and young professionals alike. This means that the tenant demographics in Edinburgh are diverse, which is always positive for property investors and landlords.  

Edinburgh is known for its resilient economy and rental market and projects like the St James Quarter certainly help with this. Rental income is consistent in Edinburgh with long-term capital gains. With this, however, come higher entry costs for investors; one would need to weigh up the worthiness of investing here first. 

Also, Edinburgh offers a lot relating to its historical charm and areas like the Old Town, New Town and Leith allow for this. The city is known for its festivals and historical sites, which can definitely be used as leverage to attract tenants. 

Regeneration projects

As with most big cities in the United Kingdom, there are many regeneration projects taking place that will improve certain aspects of Edinburgh as a whole, such as:  

• Developments: Granton Station, Western Villages, Silverlea, Edinburgh  Home Demonstrator, Granton Gasholder, and 20 West Shore Road. 
• Fountainbridge regeneration: a redevelopment of the former Fountain Brewery, which includes new shops, more office space and the development of 436 new homes, with 113 of them being social homes. 
• Granton Waterfront: with the goal being to foster sustainable growth and steer Edinburgh towards a more environmentally friendly and equitable economy, Granton Waterfront is set to serve as the model for urban development and regeneration across Scotland. 
• Improving neighbourhoods: the improvement of Moredun, Magdalene and Oxgangs is underway, with the aim to repair buildings and make homes safer, warmer and more comfortable.
• Meadowbank regeneration: the delivery of a modern sports centre with new homes and community facilities. 

Things to do in Edinburgh

With this beautiful city comes an array of things to explore, too! Your tenants will never get bored, having cultural and historic activities to choose from, such as: 

• Edinburgh Castle Tour: gain entry to this magnificent castle via the Royal Mile and take part in the famous walking tour. Get to know the characters that helped make up Scotland’s history and take a look at real relics. 
• The Old Town: for more of an insight into the history of Edinburgh, explore this mediaeval section of the city. 
• Arthur’s Seat: For those who love to take part in outdoor activities, Arthur’s Seat is available to walk up. As one of four fort hills, it offers geology and wildlife, not to mention a world-class view of Edinburgh.  
• Surgeons Halls Museums: An award-winning set of museums that house the largest collection of pathology equipment in the UK. Originally opened as a learning resource for practitioners, all are now welcome to visit. 

And there is so much more to explore in Edinburgh! 

Property market overview

The property market in Edinburgh is thriving and there is bound to be something for any investor to grab. 

Types of property in Edinburgh

The types of property that can be found in Edinburgh is vast. The Old Town is made up of mediaeval patterns of wynds and closes, while the New Town holds well-preserved examples of Georgian town planning in the UK. Throughout the suburbs, you will be able to find a mixture of types of properties, ranging from bungalows to 1970s housing developments. 

Understanding rental yields

Before we explore Edinburgh’s neighbourhoods, let’s first make sure that we understand what rental yield is. In simple terms, it’s the annual rental income from a property divided by its purchase price, expressed as a percentage. A higher percentage means a better return on your investment.

Factors influencing rental yields in Edinburgh

When investing in Edinburgh’s rental market, consider several factors that can influence your return on investment:

• Location: Proximity to universities, the city centre, and transport links can significantly impact rental demand.
• Property type: Consider what’s in demand in your chosen area. Student-heavy areas might benefit from multiple-bedroom flats, while professionals may prefer modern, low-maintenance properties.
• Local amenities: Shops, restaurants, parks, and leisure facilities can make an area more desirable for tenants.
• Market trends: Stay informed about local property market trends, including planned developments that could enhance an area’s attractiveness.

The highest rental yields in Edinburgh

Now that we understand what rental yield means, let’s take a look at the highest rental yield areas in Edinburgh for your investments. 

Leith – 6.3%

Once a separate town with a distinct identity, Leith has transformed into one of Edinburgh’s most vibrant areas, known for its creative scene, bustling waterfront, and culinary delights. 

The area’s regeneration over the past decade has attracted a wave of young professionals and artists, making it a hot spot for buy-to-let investors. Properties in Leith typically offer higher rental yields, thanks to the area’s popularity and relatively affordable property prices compared to the city centre.

Newington – 6.5%

Favoured by students and academic staff due to its proximity to the University of Edinburgh, Newington is another area that promises attractive rental yields. The demand for rental properties here is consistently high, ensuring minimal vacancy periods for landlords. 

Newington’s blend of city life convenience and the charm of nearby green spaces, like The Meadows, makes it a sought-after location for tenants and investors alike.

Gorgie and Dalry – 7.4%

For those looking for investment opportunities with a lower entry price, Gorgie and Dalry offer some of the best rental yields in Edinburgh. These neighbouring areas are popular among young professionals and students due to affordable housing options and excellent public transport links to the city centre and universities. The vibrant local scene, with its array of cafes, restaurants, and shops, adds to the appeal.

Haymarket  – 5.5%

Thanks to its strategic location near one of Edinburgh’s main train stations, Haymarket is increasingly popular among commuters and city dwellers. The area has seen significant development, including modern residential complexes that cater to professionals looking for convenience and luxury. 

While property prices in Haymarket can be higher, the demand for rentals is strong, often resulting in impressive rental yields.

Edinburgh’s property market offers a wealth of opportunities for investors looking to capitalise on high rental yields. By carefully selecting your investment location and staying attuned to the needs and preferences of Edinburgh’s diverse rental market, you can maximise your returns and contribute to the vibrant tapestry of this historic city.

If you want to learn more about buy-to-let insurance for your next Edinburgh investment, contact us at CIA Landlords on 01788 818 670.