Buying The Right Property To Rent
There are numerous factors to consider when buying a property to let out. But the starting point is deciding what type of tenant would be interested in letting the property you are proposing to buy. In other words, what is your target market? You want to buy a property that is very attractive to tenants because this will minimize your void periods (time when the property is empty) and due to demand factors will have a positive effect on nudging rents upwards.
These points need to be considered:
- The type of tenant renting in the area you are looking atDecide on what type of tenant you want for your propertyWhat type of property would attract the tenant you want?
- A family – Would be attracted to a medium/large unfurnished house in a good to very good location. The presentation and decoration of the property would need to be to a good standard. Other important factors : garden, garage & or off roadparking, close to GOOD schools, transport and shops, broadband enabled area.
- Professional person/couple – Small to medium flat or house, modern, good to very good condition, furnished or unfurnished, close to shops and public transport, broadband enabled area and parking. Very good location
- Students/sharers – Large house or flat with good size bedrooms and shared facilities, power showers, broadband included, close to town and transport, all bills included (general preference), fully furnished, en-suite preferable.
Generally speaking properties which are close to town, near to local transport facilities, accessible to shops and good schools and are typically in good or desirable residential locations are always going to let out more readily. The old adage LOCATION, LOCATION,LOCATION should be at the forefront of your mind when looking to buy properties to let out. This will help the property let more easily and when it comes time to sell you will benefit from finding a buyer more quickly and achieving a good price.
Properties To Avoid
- Close to commercial or industrial areas
- Properties too close to main roads or railway lines
- Properties with very large gardens – most tenants are not gardeners
- Leasehold flats where the freeholders covenant doesn’t allow sub-letting to tenants or has too many restrictions
- Properties with old electrical wiring, poor plumbing, no or inadequate heating, poor or rotten window frames, leaking roofs, rising damp etc, unless the price paid is low enough to cover the costs of rectifying these issues. You must also factor in the lost rent (while the work is being undertaken), the hassle factor, a contingency (if the property is in bad state there are probably other hidden problems that are not obvious). This is not for the faint hearted but more the professional property developer!
- Properties above or next to pubs, restaurants, nightclubs, car parks etc
A good local letting agent will be able to help you find a good rental property in the right area, advise you on the type of tenants, give you a costing of the necessary work to bring the property up to a lettable state, provide you with realistic rental figures and advise you on all of the legal requirements. Be aware of estate agents that are trying to sell you a property, they may be tempted to give you a higher rental figure to encourage you to buy it!
