The first thing is to remember that buying a 'buy to let' property should be viewed as a business and not personal. As an investor you should think what is right for tenants and not for yourself. Start thinking about how easy it would be to maintain, and not just liking it because of the character or pretty features a property offers.
Before even viewing any properties an investor should first consider who would be the targeted tenants for the property and one of the best things you can do before even searching for your new investment is to speak to a number of local letting agents to find out which type of property is currently in high demand and likely to achieve the best rent.
Also, by asking local letting agents what key things tenants want will help you hugely when viewing properties to buy. Your own tastes, likes and dislikes should definitely be put to one side and you should start looking for property which has the things your key tenant demands.
Here are a few things we consider important when looking for your ideal property investment:
• Be near a school or station – good transport links will always result in strong demand from prospective tenants. A number of recent studies have shown that the majority of professional tenants would like to live within 1K or closer to the nearest transport link (be it railway station or bus stop). Schools are also extremely important if you are considering letting a property to families and often higher rents can be achieved for properties within the catchment area of very good schools.
• Spacious accommodation – another important factor to consider when viewing property for investment is how spacious the property is. Again, if you are looking to rent a property to a family demand for space will be higher and will allow you to achieve a bit more on the rent. If you are considering letting a property to sharers then extra bathrooms or en-suites will also help you achieve higher rentals. We have found that open plan kitchens are more popular with younger families than older families so consideration should be given to this when choosing the type of tenant you wish to have at the property. The amount of storage at the property should also be looked at especially when viewing new build properties as a tenant will need storage as much as a homeowner and perhaps it will help them stay at the property longer and not feel that they have outgrown it.
• Type of property – traditionally buy to let investors bought mainly flats and small modern properties rather than houses but the property market is now very different with more families looking to rent due to difficulties getting mortgages and property prices too high for families to purchase. There is now demand for rental properties of all different types. It is no longer only young single people who rent rather than buy. Couples and families are also finding it difficult to get on the ladder. The obvious differences between buying a flat and a house is that often a flat will be leasehold and will incur extra monthly costs such as monthly maintenance charges and services charges and annual ground rent. These costs will obviously have to be considered in any investor's calculations when considering a property purchase.
The other thing to consider is whether to buy a brand new property or an older property. The obvious benefit of buying a new property is that they will be less expensive to maintain and for the tenant they will be cheaper to heat. Most new properties also come with 10 year National House Building Council, (NHBC) warranty that offers protection against structural defects and some damage. Again consideration should be given to the type and age of tenant you wish to let your property to as younger tenants favour more modern properties whereas older tenants sometimes favour older character properties. If buying an older property you would also benefit from much more character which could attract a more professional tenant. You may also get a bargain if you buy a property that needs work and in some cases the costs of refurbishment can be deducted against your tax. Again it is vital that you speak to a local letting agent to confirm a current demand for different types of properties so you can work out which properties are in the highest demand and what rental income you can achieve after your purchase.
• Quality of décor and fittings – fixtures and fittings depend totally on your target tenant. If you are looking to attract high earning tenants then they will expect high quality touches so look for a slick finish to kitchens and bathrooms. Most tenants will value a comfortable living area, sleeping space and good fitted kitchens/bathrooms rather than expensive appliances or gadgets, plus remember anything that is expensive will come with expensive repair bills. Wooden floors should also be avoided too as these are often easily damaged and perhaps neutral carpets would be easier to maintain over time or to replace at a later stage.
• Furnish or unfurnished – in a lot of places a furnished property will often achieve a higher rental, however it is vital that you check with local letting agents what the current demand is for furnished or unfurnished properties in the area you are looking. In the local areas we cover as a company we find that most tenants are looking for unfurnished properties. However, we are aware that the more you go into London the higher the demand is for furnished property. If you are going to furnish a property you should not be tempted to put old furniture in the property or furniture you don't want as if you don't want it others won't either. The other thing to consider is that all furniture must comply with current safety regulations. Consider your target tenant when it comes to choosing furniture. A student let will require furniture such as desks, beds and wardrobes where young professionals perhaps will require furniture that is modern and stylish.
• Gardens – if you are looking to let your property to a family then a garden is essential, however any garden should be easy to maintain and properties with excessive sized gardens should be avoided. An option that some landlords consider is to include a gardener in the rent to ensure the garden is maintained. Parking is another important consideration. If letting a property to more than one tenant then it is most likely that a demand for parking will exist especially where there are parking restrictions to local residential roads.
Finally, give consideration to the following: – good decorating will always attract tenants who will appreciate a quality home and look after it. Poorly presented buy to let homes always take longer to rent out and will achieve lower rentals. Consider the following when presenting your buy to let property to tenants: – avoid the temptation to fill your property with small nicknacks as a property needs to be relatively empty so that anyone can imagine themselves living there. Mirrors are always a good idea as they give the impression of extra space and light. Kitchens and bathrooms must always be spotless and all taps should be polished and limescale free to give a super clean look.
Why not register your requirements with me and I will then keep you informed of ideal buy-to-let properties as they come to the market – you can email me at firstname.lastname@example.org.
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