Your Key to the Perfect Buy to Let
Are you thinking of becoming a landlord or just want a practical checklist when viewing potential properties? Here are our top tips.
Rental prices are on the rise and tenant demand is higher than ever, so if you're thinking of becoming a landlord then here are our top tips when purchasing a buy to let.
Location, location, location
Obviously, you know your local area best and if you can afford to buy in it, then that makes things easier. If your own area is too expensive, then look further afield. Key to a great buy-to-let is having it somewhere where people want to live. Speak to your local agent to find out where tenants most desirable areas are. You will want to consider the yield as well as the type of potential tenants you may have applying, for example if you are looking to rent long term choosing a property in a sought after location close to local schools and amenities will mean your tenants are less likely to need to move.
Think about Condition
When purchasing a buy to let it is important to factor in any remedial works that might be required, having the property up to scratch before the tenants move in will likely lead to less issues during their tenancy. Don't forget that if the property is modern and practical you are likely to get more interested applicants, inevitably this may mean you get a higher agreed rental price. However bear in mind not to overspend, do your calculations correctly and make sure you are getting a good return on your investment.
Size Matters
This depends on your target tenant. If you’re after a single professional, you might consider a small flat, maybe even a studio, in a good, central area. If you want a family, for a longer-term let, you might look at three-bedroom properties, a larger home with more square footage, or a house in the suburbs.
Layout
Most modern apartments and houses will have fairly straightforward layouts, while older buildings may have awkward chimney breasts, stairs and rooms through rooms. If you can change the layout fairly easily, that’s a good way to increase its appeal to tenants. For example, it’s often worth moving a bathroom upstairs from the lean-to at the back or creating a kitchen/diner from a small galley kitchen and dark back room. Stick with what people expect.
Add value
Even if it’s not going to add to your rental income, it’s often worth making improvements such as those mentioned above. They’ll add value when you come to sell, and they’ll make the house easier to let. Other improvements to consider include double-glazing, a new bathroom or kitchen, and creating extra bedrooms. Spend money on making it as maintenance free as possible which will save money in the long run.
Hidden Costs and Void Periods
You need to be able to cover your costs if the property is left empty for a couple of weeks or months, or if the tenant gets into rent arrears. If the tenant fails to pay the rent, it may take months to get them to leave. You can get landlord insurance to cover this so find out your options before moving tenants in. And once the tenants have vacated, you might find you need to redecorate before you can let the property again.
Tax and Capital Gains
Make sure you’ve factored in paying your taxes correctly and don’t forget you’ll be charged capital gains when you sell the property. Save your receipts as you can claim against tax when you eventually sell. Redecoration between tenants, however, does attract tax relief.
Good Relations
It is key to get on with your tenants. Treat them well, and communicate effectively, then you are likely to find the sentiments reciprocated.
To discuss your next rental property get in touch with one of the team today on 0151 644 6000 or email rachael@lesleyhooks.co.uk
To download our free landlords guide including prices and packages click here.