Do Your Homework

Investing in property to let is not an instant road to riches scheme. Before you dive in, be prepared...

Finance

The first thing that you need to decide is how much you want to spend? Most initial investors will look at purchasing a one or two bedroom property with a value in the region of 100k to 200k. However, don’t be put off if you want to spend more or less than this. There is an investment property to suit (almost) all budgets and, as I will show, the important part is how much money the property will make for you. Once you have decided how much you want to spend then the next decision is whether to finance part or the whole (80% max) of the purchase price. It is best to talk to a specialist Financial Advisor about this. Buy to let mortgages are far easier and normally quicker to agree than normal mortgages although the criteria for approval is very different to a normal residential mortgage. However, you may decide that you are able to and wish to pay for the property outright. I discuss all of this in more detail later on.

Decide upon the area

Most Landlords tend to buy in their local area as they are familiar with the market. This is not a bad idea for the average Landlord as they can keep an eye on the property, carry out any maintenance work required, and stay local to their agents.

Do your research

All towns have good, bad and middling areas and these change over the years with developments and changes in infrastructure and employment within the town. In the first instance talk to Chattel House about good and bad areas for letting. You can ask Estate agents but do bear in mind that they will be working to their own criteria and may advise based on what they have for sale at the time. One of the best ways to research an area is to visit! Take a drive around the area that you are thinking of investing in. Look at the local shops, schools and large local employers. This is normally far more informative than looking at the demographics on the internet etc. Another very good rule of thumb is whether you would be willing to have your daughter /wife /husband /dog etc. live there. You may smile at this but most tenants (certainly the good ones that you are looking for) will work on the same basis when looking for a house to rent.

The real work begins

Now that you have decided upon an area you need to go and make friends with all of the local estate agents. Tell them what you want and make sure that they know that you have funds in place and that you will not be part of a chain. This will make you an attractive proposition to the agent and hopefully they will call you before anybody else when a suitable house comes on to the market. Remember to stay in touch with the agents. Try to call them once a week. If you can’t do this then email them regularly so that you remain uppermost in their mind. Register your search with Rightmove, Zoopla, Prime location etc. By doing this you can make sure that you see new properties every day. To get the bargains you need to be able to move quickly so having up to the minute information is essential.

Location, location, location!

This is one of the most important factors a tenant will look for. Desirable properties are conveniently located for public transport, local amenities, restaurants and bars and have parking facilities nearby. A well maintained and attractive property will be much more in demand than a rundown property. If you decide to let the property furnished, it is worthwhile taking some time to find out what features make a property desirable to tenants. When you are buying the property, try to remember that it is not you who is going to be living there. Look at it with an objective eye. Think about the property from a tenant’s point of view. Talk to Chattel House who will be able to advise you on this.

To renovate or not to renovate

If you have the money, time and inclination, you may consider investing in a property that needs some work. You’ll be able to customise it to the needs of your tenants. If you do not have the time or interest to buy a property that needs a lot of work, a newer property may be more suitable. However, it is worth remembering that even new properties will need maintenance and this will increase as the property ages. Chattel House have access to a wide range of tradesmen who we are happy to provide details of and references for.