Landlords: consider your tenants and location
The main deciding factor for where to buy your property will no doubt be influenced by the type of tenants you want to attract, as well as whatever your long-term goal is.
For instance, if you want to attract students or young professionals, you’d probably be looking for a property that has maybe 3-5 rooms that can each be rented out individually. In terms of location, for students and young professionals, being within easy reach of the city/town centre is often desirable, along with good transport links too.
In comparison, if you’re looking for long-term tenants then you might want to attract a family looking to settle down somewhere for a few years. The location would have to be nearby to local schools and amenities, and you’d probably be looking for a 2-3 bed property that you can rent out as one whole unit.
Different tenant types
Prime market tenants
These tenants might be working in the area, or the UK, temporarily, and are often high earners looking for a more upmarket property for a short period of time, and often a fixed amount of time according to their employment contract. These tenants will often rent through a letting agent rather than directly through a private landlord.
These tenants are likely to rent for a long time. This could be due to the fact that they choose to spend their money rather than save for a deposit on a house. Professional tenants look for easy transport links to make their commute to work as easy as possible.
Since the selling off of council houses, the private rented sector has become more popular to those living on benefits, than the amount of people living in social housing.
When you start your property search, you must remember that although you’re investing your money into the property, it isn’t actually a home that you’ll be living in. Therefore, you need to remove your emotions as it doesn’t need to meet your personal specification but rather your business goals instead.
Looking at it purely from an investment point of view, you might want to consider the following:
Who do you want to rent to?
How long might it take to secure tenants?
What is the rental market in the area like? Is it growing or declining?
Is there the potential to build in capital growth?
Will the rent you receive cover your costs?
Can you make improvements to the property in order to increase rental income or capital growth?
Have you looked at any forecasts for property growth in the area?
If you're still weighing up whether investing in a property is right for you, you might want to read our article on how to be a successful landlord and what failures to avoid.
If you'd like to speak to a buy-to-let specialist, please get in touch with us today.