Choosing the right rental property investment by Bolton Letting Agents Westpine Property Lettings
It is essential for any prospective landlord that when choosing a rental property, the decision is based on good investment judgment and not on your own personal taste. The type of homes that you would choose to reside in are not necessarily the type of properties that would appeal to a mass market and that would bring high rental yield. It is vital to establish your target market before purchasing and ensure that the features of the property are suitable for prospective tenants. For example if you are targeting a working professional, ensure that the property is located near to train stations or has good commuter links. If you are targeting students, ensure that the house is of a large size and is well located to nearby universities for appeal. Never underestimate the investment potential of investing in locations with high and diversified employment, good transport links and proximity to good schools, shops and other facilities. Prospective tenants, particularly those with children, take into account school journeys. Prime locations such as city centres hold their value during market downturns.
Westpine Lettings would advise any first time landlord to contact us right from the start of the property search. We are able to provide useful information on the tenant market and can guide your choice of property to ensure that the property you purchase will give you the rental yield that you require. A good tip for property purchase is to complete in winter when the market is usually on a downturn. This will maximise the benefit of your position and allow you to pick up properties for less. New-build properties have a premium. But that premium will erode over your period of investment, so reducing your returns. Consider carefully before purchasing ground-floor or basement apartments. Whilst this can be a benefit to the elderly who struggle with stairs, it may be seen as a disadvantage to some potential tenants because of concerns over security, greater noise from the apartments above and lack of sunlight.
It is essential to be sensible with your choice of property. Ensure that you know beforehand the maximum amount that you are prepared to pay for a property. If you are outbid it is often best to walk away rather than make snap decisions and pay more than your investment plan was based around.
Consider beforehand whether you wish to rent your property with furnishings. Most tenants have a budget and won’t pay extra for better furnishings. If tenants want a refit, that cost should be considered alongside a review of the rent. Don’t waste money decorating the property to your taste – walls and decoration should be kept neutral to appeal to the widest range of prospective tenant. Tenants who have previously rented are likely to hold their own furniture such as beds, wardrobes, televisions, although white good kitchen appliances such as washing machines, dishwashers and fridge-freezers tend to be favoured.
The mortgage of your rental property is generally the biggest single monthly cost. It is important to check carefully the rates and flexibility, remembering to factor vacancies into rental income and the impact of higher interest rates so that your borrowing costs don’t become unsustainable. Westpine Lettings of Bolton can arrange for a mortgage advisor to find you the best mortgage to suit your needs. Remember although the rental market is in a boom period, it is up to you to make the right decisions in order to take full advantage of any property investment.