What should I consider when choosing a buy-to-let property?
Buy-to-let properties have become so much more favoured over the last ten years or so, with many people choosing to invest their time and money into property rather than unpredictable pension schemes. A rental property, if mainly occupied, is a great way to save money for the long term – the mortgage is covered by the rent and at the end of the mortgage term, you are the owner of the property. You then have 2 options, to sell up and have a cash lump sum, or continue to rent the property out and enjoy the rent payment arriving in your bank account every month.
Deciding on a buy-to-let property is very different from choosing a home for yourself – it’s a business decision and not an emotional one.
Here are some guidelines to help you make a good choice: –
- Remember it’s a business decision
Don’t forget to use your head and not your heart! Keep in mind that you must pick a property that appeals to the maximum number of tenants, not a house you fall in love with. Money is the keyword – will the property make you money? That is the bottom line.
- Popular location
Is the area a popular residential location? Is the road fairly quiet? Are there good schools nearby? Is there a park or somewhere to walk with children or dogs? If you don’t know the area, make sure you chat to someone who does. Avoid buying properties on really noisy and busy roads or, for example, a house next door to a rowdy pub. Use your initiative and pick somewhere most people would like to live.
- Transport links
Not everyone has a car so it’s best if you can avoid alienating those that don’t. A property that is within easy walking distance of a bus stop or train station is a bonus.
- Parking space, or easy on-road parking.
We would advise against buying property on restricted roads, for example, double-yellow lines or residents permit only areas. It is another problem that any potential tenant must overcome. Ideally, buy a property with off-road parking, or non-restricted road parking.
- Shared access/yards/gardens
Any shared access tends to be a bit of a ‘sticking point’ when renting or selling, so we would recommend you avoid anything with any boundary issues or shared pathways, gardens, yards or access.
- Exterior areas – easy maintenance
A property with a fantastic mature garden is great if it’s for yourself, but not so great if you are renting the house out. Sadly, tenants are unlikely to tend the garden with the same love as you would, and are probably more likely to neglect it. Pick a house with easy maintenance exterior areas, such as paving stones or shingle – otherwise you will be the one tidying up the garden between every tenancy!
- Is the property practical and easy to maintain?
Check the ‘health’ of the property, for example, has it been recently rewired? Are the windows and doors in good working order? Is the roof in good condition? How old is the boiler? Will it need replacing soon? All these little things might add up to large expense in the long-term. It’s probably better to avoid very old properties as they are more likely to cause problems for you.
- Does the properties have a good layout?
Avoid buying property with a weird or quirky layout, for example, a ground floor bathroom that is accessed through the kitchen. You will reduce the number of interested tenants by half!
- Is it a good deal?
Ensure you get a good deal – you are in a very strong position as you are not in a chain. Use this to your advantage and make a cheeky low offer.
Now you are equipped with the knowledge to choose the correct type of house, you can property-hunt with confidence.
Have you got any tips of your own you can share with us? What do you look out for when buying a rental property? We would love to hear your experiences or stories…
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