Updated: 10 January 2020
Before purchasing a buy to let property, consider your long term goal
You could be searching for the highest possible return immediately, or wish to find the best property for long term capital growth. Most investors want a balance of both income and capital appreciation and see investing in property as an appealing alternative to low interest savings accounts, pensions and volatile stocks and shares.
Seek professional advice
This is advised at an early stage to ascertain the level of funds available for the purchase. Goadsby have in house Mortgage Advisors that can assist with this. CLICK HERE FOR MORE DETAILS
Consider the Location
The location of your buy to let property is paramount; choosing a property in a popular location will increase your chances of high tenant demand, often leaving landlords in the enviable position of having a choice of tenants to choose from, increased rental and low void periods. The type of tenant you are attracting may help decide your location. If you are hoping to rent to families it is advisable that the property is in a good school catchment, however if you are looking to appeal to the young professional market a property close to local amenities including bars and restaurants is advised.
Features of the Property
Features such as gas central heating, double glazing, garaging or parking and outside space are all attractive prospects for tenants. Well presented and neutrally decorated properties often let better and reduces void periods. Hard-wearing carpet is a good investment as wear and tear takes its toll on floorings. The quality of the property can have a huge impact on the achieved rental income. A new kitchen or bathroom may seem a large expense but with the increased rental that can be achieved this investment can be recouped quickly.
Purchasing a new property as an investment is often a popular option for property investors as they tend to come with the peace of mind of a build guarantee/warranty.
Properties requiring Modernisation
Buying a property that requires modernisation is often an attractive prospect for property investors. These properties can be developed to the ‘perfect’ letting property.
Buying a property with a tenant already in situ
The advantage of this is that rent is paid from the day of completion on the sale of the property and there is no void.
Freehold or Leasehold Properties
If the property is leasehold there will be ground rent and maintenance charges to cover that must be taken in to account. Once you have selected a suitable property, prepare a business plan with estimated income and expenditure, remembering to build in agency fees, void periods, repairs, standing charges and insurances together with ground rent and maintenance costs, if applicable.