Finding the right buy-to-let property is so important to maximise your returns and make your role as a landlord that much easier. Your choice could make or break the experience, so it’s crucial to know what you’re looking for. If you’re new to life as a landlord, consider these tips to get started.
Buy with tenants in mind
Any property you’re looking at should be suitable for your target tenants. There’s no point looking at 1-bedroom apartments if you’re looking to rent out to families. Likewise, you’re wasting your time looking a high-end homes if you’re looking to create student accommodation.
Think about who you’d like to rent to and use it to guide your search. Factors such as location, price, layout, property size and features will play an important role in attracting the right sort of tenants. Try to avoid your own preferences in most cases.
Work to a budget
Buy-to-lets are about finances more than anything else. If a property doesn’t work in your budget or won’t bring in high enough yields, there’s not much point in pursuing it. Create a thorough budget before you start your property search to give you clearer guidelines on what you can afford and what can make you money.
Consider the whole array of costs you’ll have to contend with, including renovations, regular maintenance costs, mortgage repayments and fees, legal costs, landlord insurance and agency fees if you’re looking to outsource the admin work. And don’t forget the cost of periods without tenants because these may make or break your investment.
Get the location right
Location is critical for maximising your ROI. It’s the key to attracting your ideal tenants, whether that’s students, young professionals or families. And your long-term prospects can be enhanced too, with property values and rental prices generally increasing year on year in good areas.
For your convenience, it’s worth getting the location right too. If you’re closer to your property, you’ll have more control in times of emergency and have to spend less time travelling to carry out repairs and maintenance. You may be thinking of outsourcing all your maintenance and letting work, in which case, you can buy further away.
Think about resale value
You may have monthly ROI on your mind, but there’s always the option to sell your property if there’s enough financial gain to be had. Although this may not drive your search, it can be a good idea to consider long-term resale value.
The principle of “buy low, sell high” applies here. Buying a cheaper property with potential for improvement can mean you make more on your rental income and more on a potential resale down the line.
Consider maintenance requirements
Maintaining your buy-to-let is one of your key responsibilities as a landlord. You have a legal duty to keep the property free from health and safety hazards that could potentially harm tenants.
The bigger the property, the more maintenance work it will likely need and the higher your costs may be. This is important to consider during your search because extra repair and upkeep costs could eat into your margin.