With over four million families now occupying private rental homes in the UK, many investors are turning their hands to property.
However, finding the perfect investment home in such a vast, fast-moving market can present a significant challenge for new landlords. In this article, we will break down the crucial elements of the perfect buy-to-let home, giving you a complete guide to the key features every landlord should look for in a rental property.
First, Why Choose Property?
The rental market landscape has changed dramatically over the last decade, becoming increasingly more difficult for young professionals to take their first step on the ladder. So, many tenants are willing to pay a premium for high-quality property, meaning this physical asset can provide landlords with a robust annual profit.
Additionally, unlike stocks, shares or cryptocurrency, property allows investors to be as hands-on or hands-off as they wish. For example, some investors enjoy the process of being the first point of contact for their tenants, whereas others choose to appoint lettings agents to oversee the day to day running of the home.
In summary, property is flexible and lucrative, providing a stable income for those willing to invest their time, knowledge and finances.
The Differences With Buy-To-Let
The process of purchasing a buy-to-let home is worlds away from finding a property for your family to enjoy. When buying your own home, you likely have a long list of non-negotiables to ensure you secure a property that works for your individual needs.
However, when searching for your first buy-to-let, your aim should always be to appeal to the broadest possible market. For example, excellent transport links may not be a priority for your multi-vehicle family, but they are integral to the daily commute for others.
Conversely, a large garden may be essential for your circumstances but would perhaps be too much for many to maintain.
Contemplate Your Ideal Tenant
Consider the demographic you want to target.
A three-bed semi-detached property is likely to attract families looking for a home with longevity. Priorities will include proximity to local schools as well as excellent transport links. Outdoor space and off-street parking are also factors that will help to elevate the rental yield and encourage tenants to renew their contracts.
Whereas one-bed flats are likely to attract young professionals, or even students who would prefer a little more privacy than the standard house share can offer. City centre locations appeal far more to these tenants, who like to have amenities right on their doorsteps.
Proximity to green spaces and supermarkets will always increase the desirability of your rental property, regardless of your target market. Moreover, the carbon footprint of a home is becoming an increasingly important factor for many tenants. An environmentally friendly home will help reduce monthly utility bills and the damage to the environment, which is crucial for many searching for their ideal rental.
Off Plan Homes For High Rental Yields
Off-plan property investment is the most stress-free strategy.
It involves purchasing a home before its completion, removing the prospect of wasted property viewings and stressful bidding wars. In return for your early security, developers offer significant discounts, and investors can often negotiate extras such as furniture packages and legal fee contributions.
Due to the market in the UK and the steady growth of house prices, many off-plan properties will increase in value before you even welcome tenants inside. So, off-plan homes are ideal for landlords who want a good balance between capital appreciation and rental yield.
Plus, by choosing an off-plan property, there will be plenty of homes to pick from within the block. This means you can select a more attractive property to renters, thus lowering the chance of void periods and boosting the rental price. For example, picking a home on the corner or with a balcony in an apartment block may be beneficial.
Even if you don’t decide to go off-plan, this still holds true: always look for features that will attract tenants.
Getting The Home Ready For Tenants
It’s no surprise that most rental properties are painted in neutral tones and fitted with wooden flooring or plain carpets. This not only keeps the property bright and fresh, but it helps appeal to the broadest range of tenants.
All fixtures and fittings should be in excellent condition, with electric appliances safety tested. Taking care of the property before the tenancy commencement sets the right tone for the incoming occupants.
Before tenants moving in, you should take an inventory of the property, noting any defects present. Then, give the occupants the chance to view and sign this document, eliminating many disputes regarding property damage at the end of the tenancy.
Offering an element of flexibility allows you, as the landlord, to increase the monthly rental charge. This might include allowing tenants to redecorate or bring pets into the home. This will not only boost the annual yields but encourages long and happy tenancies.
The Benefits of Working With Professionals
Working with professionals at whatever stage of your property journey will lead to the smoothest buy-to-let experience.
A dedicated property investment company will unlock a plethora of new off-plan properties not readily available to the general public. They’ll support you through the entire process from start to finish, and they’ll even do regular site visits and provide progress updates for off-plan properties still under construction.
Plus, they may be able to save you money by working with the property developers to secure incentives for buyers, such as the covering of stamp duty. This routinely saves investors a staggering amount of time, stress and money.
Moreover, once you’ve purchased the property, an effective lettings management team can deal with every aspect of your tenancy and generally work on a bespoke basis to meet your specific needs. These services range from sourcing, vetting and moving in tenants, collecting rent, and dealing with maintenance issues.
Depending on how involved you want to be and how much support you’re looking for, getting professional help can be hugely beneficial.
If you’re looking to invest in a buy-to-let property, there are several areas you need to consider to make your journey a success.
From understanding your target demographic to identifying the features, amenities and neighbourhoods that will attract renters and boost prices, it’s a process that requires lots of careful thought and planning.
But, ultimately, it’s important to remember this is an experience you should find enjoyable and rewarding – not only in the initial search for a property, but in the long-term management and growth of your portfolio.
This article was written by the team at Track Capital, who are experts in matching buy-to-let property investors with their ideal properties. Track Capital works with individuals at all levels, from those searching for their first investment to those expanding an existing portfolio.