What to Look for in a Buy to Let Property
If you’re considering investing in property, now may be the best opportunity for you to do it, but you need to make sure that the property you are looking to buy is going to make you more money in the long run. If you’ve got some spare cash set aside for your investment, you’re in a good position to start purchasing your buy to let property, but there are several things you are going to need to consider.
Firstly, assess what location you are going to buy the property in and look at other rental costs in this area to see if you are going to get a good return. Consider all of the costs that you will face, including insurance, maintenance and your mortgage.
Not only this, but will the location be attractive to those looking to rent? For example, are there good transport links, local amenities and entertainment facilities nearby? Choosing a property that is near to a good local school, a university or teaching hospital can also ensure that it will be attractive to renters as many people looking to relocate to these areas will be looking to rent.
Making sure your property is rentable.
You may have found the perfect house in the perfect area but is the house you are looking to buy going to suit the kind of people that are going to want to rent? This family home you have found may be your dream investment but it may not be seen as rentable if it is in an area where there are a lot of students, single people or couples.
Buying a property that is already let.
If you have found a property that already has a tenant in it this is a great way to start generating an income from your investment and straight away.
However, always check that you have a shorthold tenancy agreement if you do buy a property in this way and find a solicitor who has dealt with these kind of sitting tenancy agreements before. It’s also a good idea to have a chat with the current owner and tenant to see if you can find out why they are choosing to sell to see if there are any underlying problems.
Renovating a property to let.
If you are looking to renovate a property before you let it out after, you will need to assess how cost-effective this will be and evaluate just what your tenants will be looking for in the property. For example, you will need to look into what renovations can be made that will still adhere to the building regulations that are in place for let properties. After calculating this you will then need to look into your finances as to whether or not this is a worthwhile investment.
If you’re looking to make changes to the property you will need to weigh up which changes are essential and which aren’t necessary. For example, if you have an old boiler installed, a leaking roof or dated windows, then these will all need replacing before a tenant moves in as these could cost you a lot more further down the line.
However, when it comes to the interior there is absolutely no need in going overboard when the very basic will do. Be practical in your approach; a nice fitted kitchen that looks good but doesn’t cost too much is essential; washable flooring is another lifesaver that will help keep the property looking clean and tidy for future tenants; and curtains and light fittings don’t need to cost you an arm and a leg because you may find that your tenants wish to fit their own anyway.
Wherever possible keep things low maintenance. For instance, decking in the garden instead of a lawn alongside shrubs that don’t need much maintenance is a great way for keeping it looking tidy, particularly if your tenants aren’t green-fingered.
Future costs.
Once you’ve evaluated what rent you can receive, how much renovations are going to cost you and what kind of tenant you are looking to attract, it is important that you have accounted for any future costs.
If anything in the house stops working, such as the boiler or any other appliances that were fitted when the tenant moved in, it will be your responsibility to fix these. Equally, you are also required to make sure any electrical or gas appliances are safe and that any furnishings or furniture that you have placed in the property adhere to the fire safety requirements.
Additionally, you will also be required to provide your tenants with an Energy Performance Certificate. This was made a requirement from 1st October 2008. Once these certificates have been produced they are then valid for ten years and a copy must be given to every tenant that lives in the property during this period.
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