Finding the right house to rent out
Finding the right property to rent out will depend on your needs. For example, are you thinking of buying a property to rent out for students? Is it for family members or children? Or is it a flat for working professionals? In any case, rental yield is usually an important factor, especially if you’re buying a second home.
When choosing the right rental property for you consider the following points:
Location
The biggest consideration is the location, you’ll want the security of having tenants, so doing research on the area will be crucial to understand if the type of rental property you want, is right for the area.
Understanding what a tenant wants from a home will help you choose the right location. Families, for instance, might prefer homes near good schools and amenities. In contrast, students typically look for affordable properties close to their university, transport links, and nightlife.
Building type
Like location, understanding both your investment goals and who your tenants will be can help to determine which type of building will be more attractive to prospective renters.
If you are marketing to young professionals, then a flat may be the right property for you. Families on the other hand need a little more space and might require a house with parking and a garden.
Don't overlook smaller properties. If they're in the right location, they can make attractive rental homes.
Internal layout
Would the tenants you are marketing to want open plan living or would they prioritise more rooms. How many bathrooms does the property have, if it's only one could this be seen as an issue by tenants.
An unusual layout can reduce the number of tenants interested in a property and possibly the rental price. Quirky aspects such as a bathroom only accessible through a bedroom or kitchen can make a rental property less appealing.
Resale value
Whilst you may not be thinking of selling your rental property now it's wise to consider your future options. Is the property likely to increase in value, or is there work that could be done to increase the value?
Parking
Are your tenants likely to have a car, or more than one? Whilst students might prioritise public transport links over a designated parking space, for families with young children this could be top of their list.
Outside space
Thinking about the tenants you want when viewing a house is so important. Purchasing a rental property with a large, high maintenance garden could significantly reduce your tenant pool and require you to pay for a regular gardener or purchase the appropriate tools if you want your tenants to look after the garden.
Decide what is going to appeal to your prospective tenants; is it a small outside space for drying washing and having breakfast outside on a sunny day, or will they be looking for a large garden for children or pets to enjoy?
Finding a flat with a large balcony or low maintenance roof terrace could make your buy-to-let hot property.
Proximity to your house
You might want to think about how close the property is to your own home. If you are planning on managing the property yourself, and it's nearby, you’ll be on hand if anything goes wrong. You’ll also have the benefit of being familiar with the area and local tradesmen.
Your budget
When setting a budget for your property purchase think about all the costs you could incur as a landlord. What might the property need in terms of both initial spending and long term? If it is a leasehold property is there a need to purchase a lease extension? Will you need to pay for renovations, a new gas boiler or oven?
There are costs you will have to consider early on such as agency fees, mortgage fees, legal costs and landlord insurance, as well as budgeting for periods when the property might be vacant.
By carefully considering these factors, you can make a more informed decision and select a property that not only fits your investment goals but also appeals to the right tenants. And don't forget, when viewing properties, make sure you have a list of questions to ask the estate agent or current owner of the property, especially if it's already being used as a rental.
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