1. Broaden Horizons
Don’t just look close by as you may find more affordable houses further afield in a place with a higher rental demand.
2. Research
The government’s recent decision to cap the amount of housing benefit to its recipients could have an effect on private property rental demand. In this sense city centre locations offer the most lucrative form of property investment as there are more professionals looking for residency. Look into the area using local estate agents or internet listings to find the average rental charge for the type of property you want to invest in (e.g. two bedroom apartments in Manchester on average charge tenants between £600 and £700 per calendar month).
3. Student accommodation is a good investment
Traditionally privately owned student accommodation was deemed as the more expensive option with universities offering cheap accommodation that was more favourable in terms of finance. With the recent changes in university fees and many universities selling accommodation buildings to private investors, this has opened windows of opportunity promising lucrative returns.
4. Crunch the numbers
Take into account your mortgage and other payments and work out the monthly rent you can expect to receive to work out what income realistically achievable. You must also factor in the amount for the deposit considering the large percentages now required by some mortgage lenders. You must also factor in the possibility that the property may not have a tenant for a month or two (this particularly happens between tenancies).
5. Speak to people directly
It is advisable to speak to the sellers directly and when doing research don’t simply relay on property listing sites. Get advice from local estate agents to get a better idea of local demand and who the market is.
6. Lettings Management considerations
Bare in mind that being a landlord can be demanding and you are responsible should a boiler break or a pipe burst. Unless you are completely sure that you will be available to your tenants 24 hours a day it would be wise to consider a lettings agent to manage your property for you. They would also deal with gas safety certificates and energy performance certificates. Letting agents are obviously a chargeable service and therefore it would need to be calculated into your accounting and income predictions.
7. Haggle
Buying a property for investment is much different than buying a property to live in. It is for this reason alone that you can really afford to be tough when it comes to haggling, but obviously if you get too unreasonable with the price you are less likely to obtain it. Remember they need to make money too.
8. Tenants – find out about them before you agree to let
So you’re at the stage where you’ve bought the property, everything’s in place and you’ve got a potential tenant who wants to move in. Make sure you get a reference from their previous landlord and their employer (if you have hired a lettings agent to do this they will arrange all this for you). You will also need to look at their recent bank statements and utility bills because you have to be sure that they are able to pay the rent. If you are doing this yourself there are bodies that assist in such matter such as the Landlord Action Helpline.
Don’t just look close by as you may find more affordable houses further afield in a place with a higher rental demand.
2. Research
The government’s recent decision to cap the amount of housing benefit to its recipients could have an effect on private property rental demand. In this sense city centre locations offer the most lucrative form of property investment as there are more professionals looking for residency. Look into the area using local estate agents or internet listings to find the average rental charge for the type of property you want to invest in (e.g. two bedroom apartments in Manchester on average charge tenants between £600 and £700 per calendar month).
3. Student accommodation is a good investment
Traditionally privately owned student accommodation was deemed as the more expensive option with universities offering cheap accommodation that was more favourable in terms of finance. With the recent changes in university fees and many universities selling accommodation buildings to private investors, this has opened windows of opportunity promising lucrative returns.
4. Crunch the numbers
Take into account your mortgage and other payments and work out the monthly rent you can expect to receive to work out what income realistically achievable. You must also factor in the amount for the deposit considering the large percentages now required by some mortgage lenders. You must also factor in the possibility that the property may not have a tenant for a month or two (this particularly happens between tenancies).
5. Speak to people directly
It is advisable to speak to the sellers directly and when doing research don’t simply relay on property listing sites. Get advice from local estate agents to get a better idea of local demand and who the market is.
6. Lettings Management considerations
Bare in mind that being a landlord can be demanding and you are responsible should a boiler break or a pipe burst. Unless you are completely sure that you will be available to your tenants 24 hours a day it would be wise to consider a lettings agent to manage your property for you. They would also deal with gas safety certificates and energy performance certificates. Letting agents are obviously a chargeable service and therefore it would need to be calculated into your accounting and income predictions.
7. Haggle
Buying a property for investment is much different than buying a property to live in. It is for this reason alone that you can really afford to be tough when it comes to haggling, but obviously if you get too unreasonable with the price you are less likely to obtain it. Remember they need to make money too.
8. Tenants – find out about them before you agree to let
So you’re at the stage where you’ve bought the property, everything’s in place and you’ve got a potential tenant who wants to move in. Make sure you get a reference from their previous landlord and their employer (if you have hired a lettings agent to do this they will arrange all this for you). You will also need to look at their recent bank statements and utility bills because you have to be sure that they are able to pay the rent. If you are doing this yourself there are bodies that assist in such matter such as the Landlord Action Helpline.
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