Right Property

To make sure you find the right property for your buy-to-let purchase, it’s essential you do thorough research into the different areas you are interested in and the kinds of properties that are popular with the potential tenants there. Buying the right property in the right area is the first step to ensuring your investment is a success.

Buying a property in an area you already know is the easiest way to make sure you know what you’re getting into. Local letting agents are an invaluable source of information about a particular area and can tell you about the kinds of tenants that tend to look for homes there and what they want. Preferably, talk to ARLA-registered letting agents.

An important point to remember is that you’re not looking for a property you would necessarily want to live in yourself but one that is likely to be popular with tenants in the area. For example, if there are a lot of families it would be unwise to buy a one-bedroom flat but a good idea to buy a three or four-bedroom house with a garden.

The young professionals market is one of the most lucrative so looking for a property near large companies or other organisations likely to employ a lot of people could increase the number of potential tenants who might be interested in your property and ensure they will be ones with a regular income so able to pay the rent.

To maximise the capital appreciation potential of the property during the years you own it, look for an area where development is due to take place, such as new housing, new shops and other amenities or new companies moving to the area. Contact the planning office of the local council to find out about any planning applications that have been granted or are in the pipeline.

Conversely, also look out for any development that might have a detrimental effect on the property’s value or its rent ability, such as a new motorway being built nearby, green spaces that are going to be built on, any building that might block the view from the property or the natural light coming into it or any parking restrictions due to be put in place.

Any area with good transport links, shops and other facilities nearby is likely to be popular but other factors will be more important to some kinds of tenants than others. For example, families are likely to want good schools and green spaces nearby while young professionals may want bars and restaurants within easy reach.

New or purpose-built homes make the best rental properties as they are easier to maintain, less likely to have problems develop and more energy efficient so utility bills will be less. Purpose-built flats are likely to have a better layout than flats in converted houses and better-designed bathrooms and kitchens – the areas tenants are likely to pay most attention to when choosing a property to rent.

It’s also wise to avoid properties with a lot of wood in their structure, as it will need maintaining and will be more affected by any water leaks or damp that might occur, and homes with extensive grounds that will need a lot of looking after. However, bear your chosen market in mind at all times. Again, a local letting agent can help.

While you should investigate the kinds of tenants likely to be looking for property in your chosen area, it’s also important to have broad appeal so that you do not alienate any section of the market. Void periods can have a big effect on your profits as you will still have to pay your mortgage and for the property’s upkeep but will not have any rental income to cover it. You should always budget for the possibility that there will be some void periods.

If you aim to cater for the types of people most likely to choose to live in that area when choosing a property and go for one that is easy to maintain to help keep your expenses low, it’s unlikely you will go wrong.

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