Whether you’re a new landlord or thinking about becoming one, searching for the perfect buy-to-let property for the best return on investment is no easy task. Here are some tips to help you navigate the property market and secure an excellent yield, without the stress.
Establish a demographic
You can narrow down your search by deciding what group of tenants your property will be perfect for. Some of the options include:
- Working professionals
- Families
- Multiple occupancy
- Students
- Tenants receiving housing benefits
Know what you’re looking for
When you’re looking at potential properties to buy and let out, here are some of the things you’ll need to consider:
- Location – consider popularity of the location, local amenities and public transport links.
- Layout – your chosen layout should be suited to your chosen demographic of tenants. For example, students will prefer communal spaces and more than one bathroom whereas families will look for homes with more storage options and open space for young children.
- Type of building – Choosing between a flat and a house can influence the type of tenant you’ll attract so it’s important to think about the benefits of each before making a choice.
- EPC rating – In order for your property to comply with future legislation without having to undergo costly maintenance, it’s important to check if the home is eco-friendly or at least has the potential to be.
- Maintenance – Keep an eye out for any present damage such as moisture, mould, leaks and structural issues as these things could result in more costs later down the line.
- Outdoor space – Having an outdoor area, whether it’s a terrace, balcony, garden or communal rooftop, can be a huge selling point for many tenants but can also deter tenants who won’t have time to maintain it.
Avoid relying on personal preferences
It’s important to get into the mindset of someone looking for a rental home. Save your dream house for you and look for something that has wider reach and appeal for potential tenants. Opt for spending on practical things such as multiple bedrooms and bathrooms rather than aesthetic choices, as a lot of time and money can be wasted if your needs are too particular.
Calculate rental yields
This is a simple task, and it will give you a good idea on how much a potential but-to-let property can achieve.
- Take the yearly rental income of a property
- Divide this by the amount you would pay for the property
- Multiply the figure by 100 to get the percentage.
It’s always a good idea to compare yields on properties before choosing one but don’t forget to factor in maintenance and insurance costs, as these will also affect the property’s monthly yield.
Be aware of your chosen location’s value
Get to know the local market by checking on nearby listings to see what their price ranges are. There could be a thousand reasons your property is valuable, but the right location will sit at the top of that list. Price rises are often due to demand for the location, so if you find a great home in a popular area, your property’s value is guaranteed to continuously grow.
Looking for a reliable and effective agent? Look no further, contact your local Martin & Co branch today for expert advice.
