Buy to let is an area of investment that can reap large yields – provided you choose the right property in the first place. Let’s explore what you can look for …
Find the right location.
One of the most important areas in this respect is to – literally – find the right area in the first place. That makes finding a location where the prices aren’t so high that your yield will be minimal, and also that it’s a nice enough place with decent amenities so that people want to live there.
One of the best ways to make money in a buy to let venture is to find an area that’s due for regeneration. In and around London it’s possible to find pockets of towns and cities that fit the bill.
In order to find whether or not an area is due for regeneration, you can check the local council’s planning minutes. These are all online and can be accessed freely by the public.
You can also ask a local independent agent like Trading Places who know the plans for the local areas and can advise on the up and coming pockets.
Get to know your market sector
Have your typical tenant in mind before you even go looking for a property. Know what age he or she would typically be, how they socialise and whether or not they’ll work in the city or not.
If you’re looking for a first-time buyer, for instance, then chances are he or she is young and would like to live in an area where there are plenty of restaurants, pubs and perhaps even a gym. They’ll also want good transport links if working in the city.
Families, on the other hand, will probably put more emphasis on good schools, parks and living in quiet, residential area. They’ll also prefer a garden and may want to live with a dog or cat so consider this when looking at furnishing the property. They may have their own furniture anyway and be looking for an unfurnished rental.
Consider a refurbishment property
If you’re at all keen on DIY and interior design then buying a dilapidated or refurbishment property and doing it up could prove enjoyable as well as potentially lucrative. You should also be able to negotiate on price if the house has been on the market for a long time. Just try not to go over-budget otherwise you’ll eat heavily into any potential profits.
This can prove particularly lucrative with the right strategy and involves purchasing an apartment or house that hasn’t yet been built or is still not complete. You’ll be able to see how it will look though thanks to CAD technology.
This method involves putting down a deposit of typically around 10 percent and paying staggered monthly instalments with a final sum paid on completion. The plus of this type of investment is that the property will often be worth more than you paid for it once complete. Sell it and you’ll have made money by doing very little!
There is also the fact that, because you’re paying in instalments you’ll gain interest on the money in your bank account during the build process.