Are you a landlord searching for a property to purchase? Perhaps it is your first time buying a property to let or maybe you already have a portfolio?
We have written this practical guide to provide our advice and guidance and will happily answer any questions or requests for further information you might have.
Research the Property Market
We always advise our landlords to thoroughly research the local property market and are often asked for our opinion about which locations are popular, the type of property tenants are looking for and average rental amounts.
Go online and use the comprehensive property websites to gain additional information and research property blogs from trusted sources.
Ultimately, the better your understanding of the local property market the more informed and profitable your purchasing decision will be.
Location, Location, Location
Yes, we agree it is arguably an overused mantra but choosing the correct location for your rental property should be a primary consideration.
When researching which location to search for your Buy to Let property, you need to carefully consider your target market – the all-important tenants.
Some of the questions you need to answer include:
Can you afford to invest in the area?
What are the average house prices, is it becoming more popular?
Local employment opportunities
Will the local job market attract tenants to the area?
Transportation / Accessibility
Is the area well serviced by public transport or main roads/motorways?
Crime rates / Desirability of the area
Find out about the local crime rate, it is a safe place to live, will your property and tenants be safe?
Are there good local amenities?
If you are aiming to rent your property to a family, are there local schools nearby – do they have a good record? GP’s, hospitals, shopping centres, leisure centres and other recreational places should also be takin into account.
Future development plans in the area
Its always a good idea to check with the local council to see if there are plans for any future developments that might impact house and rental prices.
What Type of Property Do You Want to Purchase?
Quite a few of our landlords tend to invest in the same type of property i.e., family houses, flats, and apartments. This isn’t always the case, but it often happens.
Your budget is going to be an influencing factor in the type of property you will purchase. Some of our landlords are cash buyers, others have buy to let mortgages and other financial vehicles to fund the purchase but ultimately there is a maximum amount they can afford to invest.
What is the yield you require from the property?
We will happily work with you to assist you with the calculations to forecast the yield for each property you consider.
Is the property ready to rent?
Do you want to invest in a property that needs any maintenance, repairs or remedial work undertaken before it can be rented? Does it adhere to all the required legislation?
Can you adapt / extend the property to increase the rental income? How much will this work cost to undertake?
Is the property energy efficient?
This might sound like a strange consideration, but the law has been updated and rental properties have to have a minimum energy efficiency rating.
Are there Service Charges or other external costs to consider?
Flats and apartments are often subject to service charges, make sure you do your research and find out if any of these are applicable.
Rental income or capital growth?
To keep it simple, landlords who are seeking short term gains invest in properties that deliver high rental yields whilst those making a long term commitment will target locations with rising house prices to provide capital growth i.e. the value of the property will increase over time.
Achieving both a high rental yield and capital growth is quite possible and utilising our in-depth local knowledge we have helped many of our landlords achieve this.
If you are a landlord or considering becoming one, please get in touch with any questions you might have or to find out more about our comprehensive services for landlords.