Aug 13, 2021
5 min read
Are you looking for your next rental property investment? Seasoned investor or complete newbie, the first port of call is buying an investment property that will be profitable for years to come. So, is it the luck of the draw or are there tell-tale signs that a buy-to-let will be a winner?
Buying a flat to rent out is a tough business, and the field is peppered with land mines that can ruin your returns. But starting out with a good property can make all the difference.
There’s always a bit of prep work to do before you can dive in. These two tips will help you start off on the right foot.
Investing in a buy-to-let property isn’t the same as buying your own home, and if you’re buying a flat to rent it out, you’ll want to give yourself the best chance of retaining reliable tenants. An agent’s help is invaluable in this instance. They can help you understand where there is demand and how to cater for a large audience.
You need a budget and a realistic projection of the income potential. Knuckle down and do some maths to understand how profitable your venture can be. To help, here’s how to calculate your potential rental yield (and what this means).
Here’s what to consider when searching for your next (or first) buy-to-let property investment.
Location dictates the tenants you attract and the rental price point. Research the desired area to scope out the distance to schools, supermarkets, shops, public transport links and even the local GP. Being within easy access to these amenities is likely to raise your property’s appeal – and rent. Buying a rental property investment near a university will undoubtedly flood your pool of potential tenants with students. Some locations are better than others when it comes to affordability and desirability – an agent will be able to lead you in this.
Deciding between a new or older build will depend on the location, your budget and tenant interest. New builds can be easier and less expensive to maintain. Generally, they have a broader appeal than older builds. However, older and period properties have more character and style. They can be cheaper to buy and do up too.
Do you want to operate a house share or rent out to one family? A house share will need to have larger communal spaces with individual bedrooms for each tenant. Families tend to prefer homes with storage options and open spaces for young children. One-bedroom flats are popular with individual tenants or young couples looking for their own space.
Whether it’s a terrace or a garden, having outdoor space can be a huge draw for certain tenants of all ages. However, if you’re targeting students or young professionals who may not have the time or desire to maintain the space, it could be a luxury too far.
When viewing a property, remember that many weaknesses can be fixed, such as replacing the windows and flooring. But that doesn’t mean you want to pump money into a major refurb. Keep an eye out for any damage, such as moisture, mould, leaks and structural concerns that could result in hefty expenses down the line.
As more people look for greener homes to benefit the planet and their pocket, look for properties that are eco-friendly or have the potential to be. Don’t dismiss properties that have an atrocious EPC rating, draughty windows and are generally under-insulated. Address these points to make an older building more energy-efficient and improve its eco-credentials.
No one likes living and working amid construction, but if there is a lot of construction going on in an area, it’s probably a good growth area. But watch out for new developments that could hurt the price of surrounding properties.
Whoa, you’re thinking of buying to let. Selling may not have even entered your mind yet. But thinking further ahead, you may decide to sell the property for a profit. While no one can predict the future of the housing market, it may be something to keep in mind when looking for a fixer-upper.
So you’ve sorted out the bones of your buy-to-let property, but now it’s time to consider the interior. Neutral colours help the place look bright and clean, and you’ll need to decide how much to furnish the space. Students appreciate the basic furniture, while families may already have their own belongings. Another option to offer is semi-furnished, which includes the important appliances but with plenty of freedom for the tenant to furnish it themselves. The right option for your investment depends on who you’re appealing to.
Property Playground, furnishing and decorating a buy-to-let property has never been easier. Need to revamp the kitchen or bathroom? Install more lighting? Add furniture for that wow factor? With endless home improvement ideas, professionals and furniture choices, Property Playground helps to transform your space into a rental you can be proud of.
The adage, “Never invest in something you don’t understand”, was never truer than with a buy-to-let. Significant financial issues can arise if you have overlooked a policy or underestimated the commitment. The more research you do, the better. Talk to others who have invested in a buy-to-let and ask them about their experiences – warts and all. Our guide for beginners on how to invest in buy-to-let property is a great starting point.
Ready to take that important step to become a landlord? Once you have the keys, make your property visible the moment you book a free rental valuation. With Boomin, you can drive up interest instantly and enable potential tenants to book viewings online, 24/7. Find out more on how Boomin can help rent out your house with ease.