The business of getting a buy-to-let mortgage can take time and needs thorough research. You must also factor in the safety checks that must be passed before you can legally start taking in tenants. Once the preparation is done though, there is no doubt that it will pay off.
An increasing number of tenants chasing a relatively stable number of investor-owned properties has meant that rents have risen quickly in recent years and we may well reach a stage when young people commit or resign themselves to being lifelong tenants.
Lifelong tenants are going to need lifelong landlords, who treat renting out their properties as a profession, not as a hobby.
Work out who is your most likely customer, and present your property accordingly.
For a student a blank canvas is important so that they can add their own character. They need furniture too, whereas families are going to bring their own. They will, however, expect it to be more than just basic. It should be well presented, in good decorative order and clean.
Young professionals will want the basics in terms of furniture, which should be, if not trendy, at least not unfashionable. A Garden will probably not be too high on their list.
Budget for times when, for one reason and another, no rent is forthcoming.
• LOOK FOR THE SIGNS
Hotspots pop up if there are changes to the transport infrastructure or employment, or if a university is expanding by building a big new campus. This has happened a lot in recent years. In Dunstable and Houghton Regis the new Busway has attracted a number of Buy-to-Let landlords who have enquired at our shop on Church St recently.
• NEIGHBOURHOOD WATCH
Also look for anomalies in value. If you find two or three expensive areas with a slightly down-at-heel neighbour, that’s an anomaly that won’t last for ever.
• YIELD v CAPITAL GAIN
When deciding whether you are going for yield, capital appreciation or a bit of both, the best advice would probably to go for a bit of both. Bear in mind, though, that with this option, you won’t maximise either. And look at net yields – not gross. Net yields needs to be ahead of all your expenses and some amateur landlords underestimate the costs involved in owning an investment property. Service charges on apartments and management fees if you are having the property managed could be a major expense.
• EMPTY PROPERTIES EQUALS LOSS
Void periods are the killer. If the tenants haven’t looked after your property and you need to repaint and recarpet when they leave, suddenly you’re left with a month’s void. That can ruin your year’s figures.
• LOOK AFTER YOUR TENANTS
Fix things as quickly as you can and respond pleasantly if they tell you there’s a problem – otherwise, next time, they may not bother, and the problem will escalate from being a tiny one into a big, costly one. If you have the property managed the agent will liaise with the tenant for you and should do in a pleasant and professional manner. At Belvoir we pride ourselves on our Professionalism and Customer Care.
For more advice visit our shop at 18 Church St, Dunstable where we will be happy to advise you on which areas and properties in Dunstable, Houghton Regis and Leighton Buzzard are a good investment.
