Finding the right property
Finding a property can be easy, but finding the right rental property isn’t. Here are some tips when looking for your ideal rental property:
Follow your head, not your heart
It is easy to get carried away by a property that is your ideal home rather than matching your target rental audience. Don’t pay over the odds for a luxury designed property, you are unlikely to get the money back in rent. Remember, if you are getting a bargain property that needs sprucing up or needs major renovation, you will have to pay the mortgage while you do the work before you can rent it out.
What is the market like?
What is the demand for rental properties and who is driving it? Researching an area, its rental values, property price growth and who wants to live there is vital.
A university, big business park or airport could make one town a better rental bet, even though it may seem less attractive than a more expensive neighbour. Don’t be blinkered. If you are serious about buy-to-let as a long-term investment, then be prepared to work hard and explore different areas.
Does the property fit?
Who is your potential tenant? If there are a wealth of properties around, tenants may turn yours down for minor reasons. What is the local area like? Students or young professionals will want pubs, bars and good but cheap restaurants. Families want open space, schools, nice restaurants and good transport links.
Weigh up extra costs
Flats need maintaining, tenants need washing machines, fridges and possibly furniture. Tenants will not put up with discomfort while you save up for repairs. Make sure you factor these costs into your budget.
Decide whether you will need a letting agent or not. If you live nearby it is possible to manage your rental yourself, otherwise it can be very difficult. Letting agents may charge a 10% of rent fee, but it is often worthwhile. In addition, the lettings agent will also do checks on prospective tenants.