5 things you can’t afford to forget when purchasing a BTL
Whether you are searching for your first investment property or your 27th you have no doubt felt excited at the prospect and anxious at the same time, especially if you are worried that you could be missing something vitally important.
When purchasing a BTL there are over 175 pieces of legislation to consider so it's definitely a full time job. With consequences such as a fine to prison, it is easy to feel worried.
We have helped hundreds of landlords purchase their first BTL property and over the years we have come up with 5 key areas to consider when looking at a property…
Choosing a buy-to-let property you need to let your head take over from your heart. This is also an investment that requires a knowledge of current Legislation, location and much more.
Here are our five top tips:
Location Location Location
Choosing the correct location is one of the most important and time-consuming stages when it comes to a buy-to-let property. Your standard of tenant is usually determined before you even begin viewings, below are a few key points to consider:
• Properties close to large businesses who employ a high amount of people
• Schools – identify good school catchment area’s
• Short distance to a town centre
• Short distance to a Hospital
These are just a few examples to help ensure you are on the right track as at this stage you should work slightly in reverse, visualising what type of tenant you want before buying.
If your planning on managing the property yourself, you will need to be close enough to resolve any issues but not so close that your tenants will knock on the door every time a light bulb goes!
Who are my prospective tenants?
Understanding your target audience is going to be pivotal to having a successful rental. There may be an incredible deal on a property that is ready to go but ensuring it is the right location and appealing to the type of tenants you want should be a top priority.
For example, finding a tenant could be a quick and easy task in a popular location but the length of which they live at the property before moving on could be much shorter than you would have hoped meaning a higher turnover of tenants and a more expensive strategy. You may be adding to your portfolio and would be comfortable with shorter term agreements but if your just starting your journey or don’t have multiple deposits to invest, finding a longer term prospective tenant will give you the best possible start. Very similar to location, have an expert who knows the location and potential tenants!
Internal Spec
The condition of a buy-to-let might seem like an obvious one but the main point to consider is the rental amount it will achieve. Every property will have a minimum, average and maximum it could achieve so understanding where to spruce up is key. Keep an eye out for maintainable fixtures and fittings and a clean/functionable set up, remember this is an investment and not your own forever home. Ensure your property is clean, presentable and of good condition if you’re looking to achieve the best possible rent, after all, if prospective tenants are willing to consider poor standards you should ask yourself the question “are these the right type of tenants?”.
With the Homes Act 2018 now in force for all new tenancies, if you are planning to rent out a property to a prospective tenant you need to ensure that a minimum standard is met. You can find out more by clicking here.
Keeping up to date with Legislation
With new Legislation constantly being rolled out this is definitely a full-time investment. The latest to come out effecting all landlords are EICR reports (Electrical Installation Condition Reports). Every rental property now requires this report along with a Gas Safety Certificate, Energy Performance Certificate and much more. You can find out everything you need to know about EICR’s on our blog by clicking here.
With over 175+ pieces of legislation its imperative to understand your obligations as a landlord with the possibility of large fines and even prison sentences.
Should I use an agent?
You might think considering using an agent is at the stage of finding a tenant, but this decision should be made at a much earlier point of your journey! So, what can we help with before you even buy?
• An inside knowledge of how the marketing is performing, specifically for where your considering investing.
• Potential rental incomes to ensure it’s the right property to buy.
• Advice on maximising the rental income for a property
If you’re at any stage of the process and would like more information on how we can help, you can give us a call on 01283 537120.