Searching for a property that provides a good investment can be tricky but very worthwhile if you plan your search well. We give a list of things you need to consider when looking for the perfect investment rental property.
Firstly, you will need to work out how much you can afford. Remember there are fees and costs on top of the deposit and mortgage payments so review your finances carefully before taking the plunge. You’ll have to take into account things like insurance, survey fees, conveyancing costs, letting agents and gas safety certificates, to name a few. Once you’ve deducted these expenses from your total amount, you’ll be able to see how much you can invest in a property.
Be sure to not overpay for a property by doing lots of research on the surrounding area and checking the house price index (HPI). They say that you make profit when you buy a property, not when you sell it.
If you’re buying rental property, a buy to let bridging loan can help. Whether you’re buying at auction or plan to renovate the property before letting it out, getting a conventional mortgage in time can be difficult. A bridging loan offers a fast turnaround and can provide you with funding in a matter of days. Once your rental property is fit for purpose, you can apply for a buy to let mortgage.
In for the short term or long term?
If you’re looking to keep the property for a while, you’ll need to plan for home improvements and possible refurbishment in the future. This gives a good indication of what you’ll need to budget for before you buy the property.
If you are planning to own the property for a shorter time, you may want to look for places that won’t need much work and are good to go, like new-builds. Otherwise, the cost of renovation may eat into your profit if you can’t sell the property at a higher price later on.
Do your research
Make sure you do your homework and research areas you’re interested in as well as the type of property you’re looking for. Find out what the average rent is in the area, so you can see what your likely rental yield will be. It’s also a good idea to join a landlord’s community or association to get advice and tips on being a successful landlord and finding your ideal property.
Location, location, location
Before you decide where you want to buy property, consider the type of tenants you want to live there. For example, if you want to let out rooms to students, it’s wise to buy property close to campus and local amenities. If you prefer to let to families, you might want to choose a location near good schools in a friendly neighbourhood with a park or two nearby. This will increase interest in your property, ensuring you attract the right market.
Generally, the area you choose should have good transport links and be close to local amenities, like supermarkets. This makes sure there will always be tenants interested in renting the property.
Choosing your area:
Property sites to help your search: