5 Things To AVOID When Buying a Property TO LET & The Reasons WHY
Whether its your first BTL or you have done it before there are a few things that you need to take into account to make your purchase the BEST INVESTMENT that it can be. It's easy to get carried away but you shouldn't' make the purchase personal you should make it profitable. Here are a few pointers to get you started.
Don’t buy what you like – buy what a tenant is looking for.
When we purchase anything, we tend to go for what we know & what we like. When you are purchasing a BTL you must change your thought process completely and buy through the eyes of the person who will live there.
Take these two examples:
Property 1 a 3 bed semi with a garage & large garden @ £350,000
Property 2 a 3 bed EOT with parking & a fair size garden @ £300,000
For a personal purchase you may sway towards option 1 as your purchase will be influenced by your desires. It’s a semi so only 1 set of neighbours, it has a large garden so room for extending and adding a summerhouse.
However, in this instance property 2 may be the better purchase. Tenants will generally desire space over property type, a large garden needs to be managed and if your tenant isn’t that way inclined a garden will easily become overgrown and make your property look unsightly.
The semi may see you a little extra on rental return, but it will not return the value of the additional 50k investment.
Avoid looking at the available properties on the property portals and draw a conclusion on what to buy.
Don’t look at the portals and think there are lots of x type of property, and that must be what people buy. Click the button which shows you what has been Let. these are the property types which will be in demand. Better still, ask your local agents what they have demand for in the area that you want to buy.
Don’t be tempted to let to someone you know.
Don’t be tempted to let to people who you know. Letting a property is an INVESTMENT with hundreds of legal obligations for you to fulfil. When you know someone, the temptation is to be flexible and more often than not, that never ends well.
Don’t invest in a property which needs work if you do not have time to do the work.
If you are a handy person and can update and improve a property in a short period of time it’s a brilliant idea to do so. However, if you are reliant on trades to do this for you it needs careful consideration. Each day that the property stands vacant because your contractor is running late or because of delays with fittings will cost you money. Ideally you want the property to be TURN KEY READY or in need of a simple redecorate which can be scheduled with little to go wrong. This will mean that you start making a return on your investment immediately.
Don’t be led by what friends have bought. or think that you should buy.
Once you start discussing what you are buying with friends or family you will be inundated with their views on what to do and when. Its difficult to remain focused on the end goal when so many people have a say. Discuss what you are planning to do with Agents who will be able to tell you what the market dictates at this moment. After all, you wouldn’t ask your friend for advice on your pension, you would ask an expert. Buying to Let is no different to any other investment.