Are you looking to get your foot firmly on the ladder of property investments but don’t know where to start? Generally, people don’t tend to buy a property until they hit their 30’s so the rental market is huge. If you want to be a successful landlord, read on for our top tips on how to spot a great investment property.
Property Types
Consider properties with a low maintenance interior or garden as this will save you more work and cash in the future. Think of the amount of space in the home and as a general rule, always go with a property with more bedrooms as this could turn into a potential shared letting opportunity, if you let it out to a number of working professionals, for example, this can significantly increase your rental income compared to a single tenant or a family let. Also look into the popularity of different types of houses and how they would sell on the market in the event that you decide to sell your investment later on down the road.
Location
Urban areas are popular with renters and with a lot of young families starting out with a rented property and making it their home, an area with a good rated school will also spike interest. When you find a potential property, take a look at the Ofcom rating of the schools in the area, the government website is the best place to do this. While you are busy checking out the schools, take a look at the job market and the overall buzz of the area too as these can all help to spot a good buy. Think about what you would look for in a new area and apply it to your search.
Price & Rental Returns
Obviously the price of the house you want to buy will always be the first thing you consider but aside from that, it is useful to calculate the amount of your returns against the price of the property. This can be easily worked out dependant on two rules. Rule one is the 50% rule; this means that your future mortgage payments will be 50% less than the potential rent. Rule two is the 1% rule; which dictates that the rent should be 1% of the sale price. If either of these percentages match up then you are most likely onto a winner.
If you are unsure about any aspect of buying a property, whether it is your first home or a buy to let, then talk to us. We would be happy to guide you through the process. Get in touch here.