The secret to a landlord’s success is largely down to the property he purchases. However, it can be hard to know what type of buy-to-let property to buy if you are a first-time landlord. Mistakes in the buy-to-let business are costly, so arm yourself with as much knowledge as you can.
This article covers:
- How to identify what buy-to-let property you should buy
- What research you should undertake
- Questions to ask a lettings agent
- How to attract as many tenants as possible
- How to target the right tenants
How to identify what buy-to-let property you should buy
Put yourself in the tenant’s shoes: what are they looking for in a property? If you hope to buy in a university town, think about the type of property that meets students’ needs. Undergraduates look for houses with many bedrooms that they can rent with friends.
A one-bedroom flat with it’s own parking space is unlikely to appeal to students but it would be ideal for a young professional couple who drive to work in the neighbouring town.
You must approach purchasing a buy-to-let property from a different angle to buying a property to live in yourself. Ignore personal taste and avoid property requiring a lot of maintenance. Self-contained, one-bedroom flats are less hassle (and often ultimately more profitable) than a rambling period property with seven bedrooms and a large, unruly garden.
Research you should undertake
Start with the experts: consult letting agents rather than estate agents for advice. Make sure you use an agent who is registered with a recognised body, such as the Association of Rental Letting Agents (ARLA), the National Approved Letting Scheme (NALS), or the National Association of Estate Agents (NAEA), to ensure they are reputable.
Questions to ask a lettings agent include:
• What type of property is in short supply on the local letting market?
• Is there demand for flats or houses, with two, three or five bedrooms?
• How many bathrooms should there be per bedroom?
• Are patios or small gardens popular, and do they add rental value?
• Are most tenants commuters? Do they tend to travel by bus, train or car? If
they travel by bus, for example, is the property on a good bus route? Is it
close to the station? Is there secure parking?
How to attract as many tenants as possible
The greater the number of prospective tenants your property appeals to, the less chance there is of it lying empty for long periods.
Keep your property neutral; from the colours you paint the rooms to the fixtures and fittings. Location is the most vital issue for most tenants – more important than size, cost, décor and outdoor space.
After location, the next most important features are good quality fixtures and fittings; parking; size of rooms; and whether the property is furnished or unfurnished. When it comes to fixtures and fittings, good quality kitchens rank higher than good quality bathrooms and 25 per cent considered a shower to be vital.
How to target the right tenants
If you are using a lettings agent to find your tenants, they will handle the advertising of your property. To keep costs down, some landlords consider finding their own tenants but you need to think carefully about the right approach.
There are a variety of places to choose from where you might advertise your rental property, including:
- Online: Setting up and maintaining your own website is an expensive chore and won’t guarantee enough, if any, traffic to your site. Instead, advertise on the online version of your local paper, or on specialist property websites that charge a fee for featuring your advert.
- Local paper: An advert in your local paper has a good chance of reaching prospective tenants in your vicinity.
- Loot: Papers such as Loot let you advertise your property for free. This is the first place many prospective tenants look so you will reach an interested audience.
- Public noticeboards: A good place to stick an advert is on a noticeboard in universities, hospitals or big companies in your area. Think carefully about your target tenant before choosing your noticeboard.
- ‘For Rent’ board: You can make one of these yourself fairly cheaply and easily. Make sure it is prominently displayed with your telephone number so that potential tenants can contact you.
Useful contacts
- Association of Residential Letting Agents (ARLA) - 0845 345 5752
- National Approved Letting Scheme (NALS) - www.nalscheme.co.uk
- National Association of Estate Agents (NAEA) - 01926 496 800
- Landlordzone – www.landlordzone.co.uk