Size and price are not always the main considerations when looking to
buy an investment property - value for money, quality and location are
more important. Investing in new-build flats, old houses or typical suburban
terraces all have merit in different ways, it depends on your investment
objectives, timeframes and budget. Before investing there are numerous things
you need to research including – but not limited to – mortgages and rates,
fixed costs (such as service charges in flats), potential repairs and
improvements, furnishings, gross and net yields, plus likely returns on capital
employed.
In my mind, the most important consideration to assess is demand - will
the property you buy be in demand in the current market at the
time you complete, and will it continue to be sought after throughout the
duration of your ownership? Houses seem to be more popular than flats,
larger bedrooms are better than singles, good nearby transport links are also
useful and double-glazing is becoming a requirement for most tenants. Location
of the property is also vitally important - the main drivers are access to
train stations, good shops and amenities and in the case of growing families,
good schools.
The condition of property should also be considered. Tenants want dry,
structurally sound properties in good condition (cracked fittings, marked
walls, damaged appliances, grubby or old fashioned kitchens and bathrooms
are all a turn off). Think carefully about the size and layout of the
accommodation too. Most tenants will dislike small living spaces, odd shaped
rooms and bathrooms without natural light. And remember, tenants have a strong
sense of rental values so the days of landlords setting the rent to cover their
mortgage are gone and they must therefore buy wisely.
A BTL property should look good from the outside (kerb appeal). If the
inside is immaculate but the outside isn’t, you will struggle to get people
through the door. Ideally the property should be semi-detached and have gas
central heating and a shower. Double-glazing is another benefit.
Think about the age of the property. The younger the property, the less
maintenance you will have. If you purchase a Victorian property it is likely
you will have to rewire the property, and I would strongly suggest that BTL
landlords have the gas and electric checks done on the property before Exchange
of Contracts. If problems are found the cost of rectifying the issues could
potentially come off the agreed sale price.
2 and 3 beds are the most popular (with 2 beds usually giving a better
return on an investment), but it is essential that you understand the BTL
market and complete all your homework before purchase. I would urge all BTL
landlords to carry out a cost analysis before committing and have sufficient
funds set aside for potential void periods and major repairs (a new boiler
could cost around £1500, if you cannot afford to replace it then don’t buy the
property).
If you would like some advice about buying to let, whether you are a
landlord with an existing portfolio or someone thinking of investing in the
Milton Keynes rental market for the first time, please email us, call us on 01908 562582 or pop into our
office on London Road in Stony Stratford for free advice and guidance.
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