The ultimate question for both seasoned landlords and those taking the first steps into property investment…
What type of property do I buy and where do I buy it?
Your Own Goals
Before answering this, you need to know what you want to achieve from your investment?
- Is it a Short term or Long term investment?
- Is it a potential first home for your children?
- Are you a risk taker? Higher risk properties such as HMO’s (Houses in Multiple Occupation) can offer higher returns but may take more management time.
- How will you fund your purchase? Will it be a Mortgage or Cash purchase?
Your Target Market
A big decision affecting where and what to buy is who you want your property to be rented to and how much you’re going to rent it for.
A good idea is to research potential rental areas and the types of people that are renting properties there, as well as how much they’re paying. The online property portals offer lots of information.
Whether you target families, students, professionals or retirees will determine what you can charge and what type of property you will need to invest in.
A family will likely need a house with more than two bedrooms; while a young, professional couple may be happy with a one bedroom apartment.
You need to be clear on one thing; the chosen area is not where you would necessarily want to live!
However, it may be in the town you live in, a nearby city or, it could be further afield.
Ultimately this is an investment, so you need to consider the possible rental return. Put yourself in the shoes of your target market and try to understand what it is they may want;
Transport links to major cities, vibrant nightlife, local sports clubs, good schools and neighbouring families or a large population of students – and remember, while the area may not be to your taste, you won’t be living there.
Being a landlord always has a level of risk. You need to be aware of every eventuality when it comes to working out what you can afford.
The actual process of buying a buy-to-let property is much the same as buying a private home as you will incur mortgage costs, a deposit, legal fees and stamp duty.
Potential void periods where no rent is being received may mean that the mortgage will need to be covered without rental income being received. Tenants may not pay their rent which also needs to be taken into consideration.
How We Can Help
At Professional Properties, we do offer a Property Sourcing Service where you meet with us and tell us the answers to all the questions above in a lot of detail!
We call it the ‘Buy-to-Let Road Trip’…
We then go away and find suitable properties that meet your requirements.
To book your FREE, NO OBLIGATION Property Sourcing Workshop, please click below: