Following on from yesterday’s article on property investment in Liverpool, we’ve created a list of top tips for investing in property and making a profit from buy-to-let properties based on information provided by Simon Clarke from Acentus Real Estate.
Location, Location, Location Focus on finding out which cities have the best long-term growth in terms of house prices and other economic factors. Clarke cites Liverpool as an example of a city that ticks all the boxes when it comes to financial stability. From its employment rate to its upcoming infrastructure investments, the city has much that makes it attractive to those looking to profit from property over the longer term.
Location, Location, Location No, that’s not a typo. After choosing a city, narrow down your locale even further. Look at local amenities; are there nearby shops and bars? Is it near a frequent bus route or train station? Is it within walking distance to the business centre? Consider the quality of the neighbourhood, is it run down and lacking in investment or is it an up-and-coming area that could see growth in the next few years?
Amenities As well as outside of the building, think about what is included inside. Apartments that come with a concierge service, onsite gym and communal garden areas are increasingly important to renters, and as such, have a higher demand. Clarke says:
“Next to location, a development’s amenities are one of the most important factors to consider before making an investment. If the building has features that make it stand out from the crowd, that’s going to increase its appeal to renters, helping to improve yields and avoid void periods.”
In terms of location and amenities, you should be seeing your investment as somebody’s home rather than a cash cow. Invest in a property that tenants would be happy to live in and in return you’ll attract tenants that look after the property and pay their rent for many months and years to come.
Get the Best Mortgage Deal There are plenty of buy-to-let mortgage products on the market these days. In fact, a quick search for buy-to-let mortgages on Compare the Market, using the site’s pre-filled criteria, results in 393 product options at the time of writing. With so many products available, investors who are using a mortgage for their buy-to-let property purchase have plenty of choice over the terms of their borrowing.
Budget for Unexpected Costs Since the Tenant Fees ban came into force in June, landlords are supposed to be responsible for costs such as maintenance, management and letting agency fees. Understanding from the outset what these costs might be is an essential part of calculating your likely yields and the development’s ongoing viability.
A financially responsible landlord should not be simply hiking the rent price to cover these fees, and if that seems like your only option then maybe property investment isn’t the right option for you.
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