4 Things To Look For In A Potential Rental Property

Buying to rent is an attractive proposition for many reasons. Perhaps you’re looking to begin earning a more passive income, maybe you want to take the first step in starting your own business, or perhaps you’re simply looking ahead and thinking about ways to increase your assets for when you reach retirement age. Whatever it is driving you to purchase your first buy to let property, you need to make sure it’s a wise investment, so here are 4 things to look out for. 

  1. The cost
    Perhaps unsurprisingly one of the main things to consider when looking at potential properties is how much initial investment you will need to make and what potential return you could see. In terms of the initial investment, you may already have an amount of money saved up to buy the property outright or you may be looking at taking out a rental loan from a company such as Visio Lending to cover the cost of your mortgage. Either way, the price needs to be right and ideally, you’ll be looking at properties selling for below market value. When it comes to potential rental returns you’ll want to ensure that you can make a profit after making your mortgage repayments and putting money aside for maintenance and agency fees. The maintenance aspect of the property is often what is most overlooked, so when choosing the property to buy remember to check the quality of the roof, heating system and major appliances that will cost you the most to replace.

  2. The location
    The location of your property can make a big difference in the amount of rent you can charge your tenants. If you are looking to cater to families then an important factor to consider is being close to or in the catchment area for a good school. If you are looking to cater to young professionals then a location with good transport links is advisable to help them with their commute. Whoever your target tenant is, do a little research into the kinds of things that they typically look for in a property to help you decide on the best location for you to buy in.

  3. The condition
    More often than not, the properties that are below market value and represent a good investment opportunity require a little bit of work so it’s important to be clear about what jobs you are comfortable doing and which you will need to hire in professional help for. Most of the time a fresh carpet, a lick of paint and a general clean can do wonders for a run-down house, but on occasion, you may need to consider larger-scale improvements such as installing a new kitchen, bathroom or heating system. Remember that the improvements you make to the property before being able to let it out will need to come out of your total budget.

  4. The current real estate market
    The real estate market can be influenced by many factors causing property prices to rise and fall. Keep one eye on the market at all times to see if its a good time to be buying or selling.  

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