LOCATION, LOCATION, LOCATION…
Three small words that can transform your property investment decision.
As a new landlord or investor in the buy to let market, what would be your first priority – the type and purchase cost of the property, or the place in which it is situated?
There is no single, easy answer to this commonly considered question, but in property circles the phrase ‘location, location, location’ is often referred to as the first three rules of property investment.
When looking for the ideal place to invest in or to rent, it is worth remembering the adage ‘you can change the house, but you cannot change its location’.
To find a property that will appeal to a tenant and provide a good level of rental income and/or capital growth it is extremely important to firstly define that appeal. There are many considerations to take into account and a good place to start is to look for towns, areas or streets that are currently in demand, and are likely to be increasingly popular in the future.
Location is always a key driver, with proximity to work, schools, commuter routes, shops and public services amongst the many factors to be taken into account when choosing to market a property as a buy to let.
In today’s market, there is an ever accelerating need for private rented property, with tenant demand often outstripping supply. To be absolutely sure as to whether a property would make a good rental investment it is worth consulting a lettings specialist such as Belvoir Lettings.
Expert local agents like Belvoir Lettings can identify local trends and spotlight properties that are the most popular for the type of tenant looking to rent and the best areas in which to find them.
They will know where property ‘hotspots’ are and which parts of a city or town are driving the market.
Many buy to let investors choose to stay local in order to ‘keep an eye’ on their investment. It’s a strategy that works for thousands across the country, but there is no reason why a buy to let investment cannot work just as successfully hundreds of miles away – provided you make the right choice of professional lettings agent who can manage, maintain and keep a check on the property on your behalf.
Within the Belvoir national network of over 160 offices there is a high proportion of landlords who own just one or two buy to let property investments, and many of these are in a different part of the country to where they are based.
In cases like this an agent will have all the right up to date local knowledge and know properties and locations with the highest tenant demand. They will be able to advise on current, achievable rental levels and help avoid the pitfalls of investing in the wrong areas.
Belvoir’s advice for helping to decide the best location for a property investment include:
- Only decide on where you want to invest after thorough research.
- Do not make a decision based on the look of the property alone.
- Just because it appeals to you, it will not necessarily be a good rental investment.
- Providing tenants with a quality, well maintained property for them to call home carries responsibilities.
- Only work with a local agent that you have checked out, trust and who has gained all the relevant professional industry accreditations.
- Remember that big is not always best. A one or two bedroom unfurnished apartment can often yield a better return than larger, four bedroom furnished houses. It’s all down to location and the type of tenant you are targeting.
- Overly high ‘yields’ – or returns on an investment – can sometimes indicate hidden issues and may not necessarily lead to a good investment.
- Beware of “buying cheap and paying dear”.
- If a property is located in a low quality area it can increasingly become run down – attracting the wrong type of tenant and achieving poor long term capital growth.
Whilst there are many other things to consider when entering the buy to let market, ‘location, location, location’ must always be uppermost in the mind of a landlord investor.
Sometimes the difference between a good rental property and a not so good one can be down to which side of the street it is on, let alone its geographical location.
If you want to avoid costly mistakes early on in the process, invest in good local, experienced advice. Initial consultations with our office are both free and carry no obligation to proceed.
At Belvoir Lettings, we can help to source suitable properties and steer people away from opportunities that, at first, may appear good on paper but may not prove to be the best decision over the longer term.