Buying a Property to Rent: Things to Consider

21 Jul 2017

Buying a Property to Rent: Things to Consider
If you are looking for a buy-to-let property or you are renting a property that you already own, we offer some things for you to consider.

You will no doubt be looking to make a return on your investment but you might not know what to look out for. There are some things you should be aware of when buying a property to rent out, and you should also make sure you plan your spending carefully.

We have put together a blog guide with some top tips on the process to help you make the most out of your investment.

Do Your Research

It is important to research the market before you decide on a property or even an area to buy in, to make sure that you get a return on investment. You will also have to consider the return that you are getting, because it might be the case that you can actually achieve a better return through other investments. Although buying a property to let can be a great way to invest your money, there are also some drawbacks too. You will need to factor in things like maintenance costs into your budget and also consider what would happen if the property sat vacant for a month or two in between tenants. In order to calculate your return on investment you will need to consider two thing;

  • Rental Yield; what your tenants pay in rent, minus any maintenance and repair costs

  • Capital Growth; the profit you would make if you sold your property

Consider the Locality

One of the things that you should consider is not only the area you are looking to buy in but also the locality of the property. Many of the people who are looking to rent are doing so for a shorter period than those looking to buy. When renting a property one of the deciding factors can often be the local amenities of the property and how close it is to things like the nearest station. If you find a property that is in a good area and close to other local amenities then you could achieve a higher yield from your tenants each month. This is something that you should look to factor in when buying a property to rent.

Think About Your Budget

You should also consider your budget and think about how much you can afford when it comes to buying property. You don’t need to go for a new build or a property that doesn’t need a lot of work doing to it if you are happy to put the time in. This is because you can still make a profit on the property if and when you come to sell it, so any value that you add to the property will be a good return for you. If you are on a tight budget then it can be better to go for a cheaper property that needs work doing it in order to increase your capital growth.

Consider What’s Involved

You will also need to consider what is actually involved in renting a property and exactly how hands on you want to be. If you are looking to make your investment a full time role and are happy to commit then you can handle the rental yourself. But if you are looking to invest in a property as an additional means of income, then you might not have the time to manage the property with the demands of your job. It would be a good idea in this instance to hire an agent to manage the rental of your property, but this will of course add to your costs.

 

Considering all of these things when you are looking to rent a property is important to make sure you know exactly what you are getting yourself into. If your tenants are moving into your property and need some help with their belongings, then we can provide the perfect removals service. Or if you need to move furnishings to your new property then we can help with that too. Get in touch with us today to see how we can help.