There has been plenty of coverage about incoming buy-to-let tax changes and how this is bad news for landlords and investors across the country.
However, buy-to-let still represents a very good investment opportunity if you choose the right areas and market your property well.
Returns and yields can still be strong if you are clever, canny and well-organised.
What makes an excellent buy-to-let property, though?
Firstly, and arguably most importantly, location.
Desirable areas are desirable for a reason. People want to live and work there. They may have buzzing night-life, excellent transport links, a thriving university, world-class attractions, fine restaurants, good leisure facilities and plenty of greenery, or it might be a place that offers peace and tranquillity away from the hustle and bustle.
Either way, if you invest in a desirable location your chances of letting properties out is that much higher (and easier) because demand is so great.
In addition to this, your chances of selling for a good price if you ever wanted to exit your investment would be that much greater if you’d originally purchased in a desirable location.
Properties that are close by to (or, even better, within walking distance of) local amenities like shops, libraries and restaurants will have considerable appeal to tenants, while easy access to good local schools and wide-ranging transport links could be a clincher for families or young professionals.
What’s more, investing early in up-and-coming areas could bring plenty of benefits further down the line. Ask your local letting agent to identify the locations that are ripe for investment or regeneration. Getting in before the competition could be crucial.
It’s also worth noting that parking spaces will be a big consideration for many tenants. If the property has an available parking space, that could be a massive selling point to potential tenants. It could also mean that you can charge slightly more in rent and it could also increase the value of the home if you ever sell it on.
Similarly, outdoor space will be very attractive to some tenants, particularly families with young children and young professionals who are keen to entertain in the warmer months.
It might be a garden, a balcony or some other form of outdoor space, but this can be a real selling point.
If it’s south-facing, all the better. When it comes to outdoor space, maintenance is a consideration. The bigger the garden, the more looking after it will require.
The type of property is of course also important. Does it need significant renovation or is it good to go as it is? If it’s immediately ready for people to let, this enables you to have a stream of rental income from the get-go.
If it’s in need of some refurbishment and tender loving care, it might be a while before you can get tenants in place. It might also cost you a fair bit to bring the property up to scratch.
On the other hand, a new and freshly renovated house will have significant appeal and you may be able to charge higher rents because of the excellent quality and ‘newness’ of the property.
Another possibility is that you invest in a property that already has tenants in place. Again, this would mean an immediate and regular supply of rental income.
If the tenant has been there for a long while, you’ll know that they will pay you on time and not cause you any hassle. When you’ve just invested in a property, that’s the sort of thing you want to hear.
When it comes to investing in buy-to-let property, leaning on the advice and knowledge of an experienced letting agent will help you to know the state of the local rental market, the best places for investment, the sort of rental returns you can expect and how high tenant demand is in any given area.
At Letting Solutions, we have the required experience and know-how to help you make the most of your buy-to-let investment.