Investing Wisely 1st Apr 2017

Choose the right property, at the right price, in the right location.
You need to do your research carefully, bearing in mind what your budget is. This is a business investment so tackle it with a business mind. Do not pay way over market value just because you have fallen in love with a property. You need to weigh up monthly yield verses capital growth and decide what you are looking for, then invest wisely. Consider all costs involved. Take advice from those in the know – The Key Place are well placed to advise.

Location is key. You need to consider what you can afford, in which area, and who your tenant market will be. What sort of property is in high demand in the area in which you are looking? For example, students, families, professionals, or DSS. If you are a buy to let investor looking at expanding your portfolio, you should consider spreading your risk to keep you safe. It may be worth thinking about different areas and different property types, not just sticking with what you know. That way, if that market dips in one area for any reason, you will be less exposed.

Think about the following:

• Which areas are in high demand? Where do tenants want to live?
• How many bedrooms can you afford (do you want to go down the HMO – house in multiple occupation) route?
• Which properties bring in the biggest yields?
• Which properties will achieve the greatest capital growth?
• Do you want to buy a new-build or traditional tenement type property?
• How much can you afford to refurbish a property, or do you need to buy in walk-in condition?
• What is the size and layout of accommodation like?
• Does the property have kerb appeal? Bear in mind that tenants may be put off if they have to access the property via a dark alleyway.
• What are the local amenities like? Consider transport links, distance to main cities, local schools and shops etc.

Is the property ready for renting?
It is essential that you prepare your property for letting in order to attract the best tenants and achieve the best rent. If the rental property down the road looks a lot better than yours, then rest assured you will lose out. Today’s tenants want clean neutral spaces with quality fixtures and fittings. Ensure the property is spotless. If work needs to be done then factor this into your budget before you buy, and bear in mind timescales for completion as you want to get the property rented as quickly as possible. Ensure you have a detailed inventory documenting the condition of the property at the start of the tenancy.

Exit Strategy.
From the outset you need to have a clear idea of the purpose of your buy to let investment. As mentioned above, are you buying to achieve a monthly yield or longer term capital growth? Are you buying the property for your children once they are older or yourself in retirement? Your longer term aims will affect what you buy and where, so bear these in mind at the start of your investment journey.

Managing the property on an on-going basis.
Do you have the experience or the time to manage the property yourself? You have to be available all day, every day, answering queries from your tenants, organising trades to do repairs, advertising your property and selecting the best tenants (for a full list of what’s involved see accompanying newsletter article). If this is not for you then consider hiring a letting agent for a stress-free approach to help you succeed in creating financial success.

So how can The Key Place help you?
The Key Place has in depth knowledge of the local markets in which we operate which can help inform your buy to let decisions. We also offer a full buy to let service. We can source high yield properties, help find the best mortgage, complete the acquisition and then manage your buy to let investment. Contact us now for further information.