When looking to purchase a buy to let property, there are many things to consider and this blog will cover what to look for, and what to avoid.  

First thing’s first, you will want to speak to an independent mortgage broker to see what your options are and the most common mistake many first time investors make, is paying over the odds when it comes to interest on their mortgage repayments. An experienced independent mortgage broker will run through the finances, shop around for the best deal and put together a package that suits your needs. 

 
What’s next? Here comes the exciting part, looking for the perfect buy to let that works for you.

  
Sometimes the yield is not the most important thing to look for, and a few things that should be considered are: 

1. Area
2. Type of property
3. The length of stay or void periods 
4. Condition 
5. Things a potential tenant may look for 

 Area:  

Buying an investment in the right area is crucial. Not only do you want a good return on investment when it comes to potential rental income but capital appreciation also plays a vital part of maximising your return on investment over the term of your ownership. Naturally, some areas can remain fairly stagnant when it comes to the property prices increasing over time, and others increase in value much quicker.  

Type of property:  

It does depend on what sort of figure you have to spend, and if you have the budget for a house in the right area, then things should work out well in the short, and long term. Depending on where you might be looking to buy your investment, houses tend to increase in value better than flats and also, may offer less void periods between tenants. Certainly within Torbay and Teignbridge, this is the case and we do find that houses increase in value more than flats and are also in high demand.  

The length of stay and void periods:  

This ties in nicely with the fact it’s not always about looking for the highest yield. Your rental income is important, but if you purchase a property that may attract a higher turnover of tenants, then you will have more void periods where the property is empty for longer. For example; if you purchased a 3 bedroom house with a slightly lower yield and the average duration for a tenant renting the property is 3 years, then you may only have a void period once in every 3 years. On the other hand, let’s say you purchase a small 1 bedroom flat with a high yield, the property could be outgrown or used as more of a short term home and therefore the average term may be 6/12 months only then you could be looking at 3 void periods in the same 3 year term meaning a loss of income at each void period, bringing your overall income down dramatically throughout your period of ownership.  

Condition:  

When looking to purchase a property, the condition will play a big part in your decision and sometimes purchasing a modern property isn’t all bad. If your purchase is ready to rent, you can find a tenant as soon as you complete your purchase thus only leaving a small void period. If you can find the right investment that requires work, you will have want to weigh up how much it’s going to cost to renovate, what the resell value may be once finished and the time it’s going to take to compete the renovation. Only take on what you feel comfortable doing, costly mistakes can be made when buying an investment that requires work if you don’t know what to look out for.  

Things a potential tenant may be look for: 

This all depends on what market you are looking to attract, whether it be a family with children, single occupants or couples. If you are hoping to buy a property that may be more popular with families then things to consider would be parking, garden, 3 bedrooms and local schools. If you are looking to attract a single occupation then perhaps a 1 bedroom flat or a 2 bedroom house in a more central location may work. When looking to buy an investment, you want to have an idea of what rental market you are looking to attract and then source the right property.  

iMove Estate Agents are experts when it comes to sourcing fantastic investment properties. If you want to purchase a buy to let or would just like some advice feel free to give us a call.