What Sort Of Property Should You Buy To Let Out?
If you are considering purchasing an investment property with a view to letting it out you need to decide what sort of property to buy. As a landlord, your decision will be based upon a number of factors so let us have a look at some of them.
Obviously, the amount you have available to spend on a property potentially made up of savings and buy-to-let mortgage will have a huge bearing on your decision. You will also need to build into your costings any improvements/alterations the property may need as well as the possible purchase of furnishings.
% Investment Yield
In theory, the higher the value of the property, the greater the rental income but the important factor is the % investment yield. For instance, does a property valued at £200,000 provide a lower or greater % investment yield than one valued at £400,000? If it is significantly greater then is it better to buy two properties at £200,000 each as opposed to one at £400,000? You may wish to seek some professional advice in that respect.
Detached, semi-detached, terraced or apartment?
This decision will, in many ways, depend upon not only your budget but also the type of tenant you wish to appeal to. For instance, if you wish to rent to a family then you are going to be looking at buying a house rather than an apartment.
If you favour renting to an executive and his/her family then you may be better buying a detached property which should be in a good area with access to both private and state schools with an excellent reputation. You will also want it to be within reasonable travelling distance of quality shopping facilities.
However, if you wish to focus on renting to single/couples then you may wish to consider an apartment. Generally speaking, as long as it is within walking distance of a corner shop and transport then that is likely to be adequate.
We hope that the above provides some useful information for those of you considering becoming a landlord for the first time.