It sounds like an easy way to make money. Buy a house and let it out for a profit. After all how hard can it be? There is a shortage of property. The rental market is getting bigger all the time. Not only that, people pay premium prices for renting out holiday cottages. It does seem you can’t lose as a landlord. Property can be a tempting market and buying to let looks like a sure way of making some money. What things do you need to consider if you are thinking about such an investment?
The state of the market
Any investment is always the balance between risk and benefits. At the moment interest rates are low. That means investing in property is a good bet, if you can afford the deposit. Buy to let mortgages are available but they do involve costs. You will pay fees and you need to do your sums. If it looks like you can afford it then you’ll need to consider some of the issues. There are hoops you’ll have to jump through before you can count the rent money in your account.
Look for the best location
It makes sense for you to look at your property as an all round investment. That means you would like the value of your investment to increase while you are letting it out. Choose a promising area. It doesn’t have to be one that you would personally choose to live in. But it should be somewhere that is attractive to potential tenants. When looking to find the right property seek property investment advice from the professionals. You want to be able to secure a great investment, but you also want to ensure it is in the right location.
That maybe because of a proximity to facilities or simply because it is close to a good school, or even an access road to a work centre. Perhaps there is a college nearby. Letting to students can be an attractive prospect.
Is the best location for you somewhere you already know? It would also make it easier for you to maintain the property and keep an eye on it. It maybe that you can afford to look further afield. If you are using a letting agency then you may not even have to be there. That opens up all sorts of property possibilities.
Who are your tenants?
If your property is close to or even located in a University town then you might consider letting to students. These properties are likely to be shared and the more bedrooms the better. You’ll need to provide a shared living area and a functional kitchen. Students are the not the most fastidious tenants and there might be drawbacks to consider.
Your property might be empty during the holidays for example. There is a greater risk of mess and possibly even repairs. You will also have a high turnover of tenants and quite a lot of administration to take care of.
The needs of young professionals will be different. They might like to be closer to restaurants and bars. Your property might benefit from a more upmarket feel. Families will have their own ideas about a property and enjoy a blank canvas to make their home in. As tenants they will be bringing in their own furniture and looking stay for a longer tenancy.
If you do your sums and find the right property you could well be on the road to enjoying an extra income as a landlord. On top of that you will be reaping the benefits of a lucrative property investment.