Finding your perfect BTL property: 5 tips for savvy investors
As a buy-to-let (BTL) investor, identifying the right property to buy presents challenges and carries high risk.
These are magnified, given the financial impact of making the wrong decisions. Several factors are to be considered, such as location, property type, rental yield, and tenant demand.
In this article, we'll explore how to narrow your shortlist of potential properties on the market. Plus, outline the support you can expect from a Lettings Agent with investment-find expertise, such as The Robinson Jackson Group.
Building a Shortlist of Investment Properties
Here are five key factors to help you get started with your shortlist of properties to view and potentially purchase as a BTL investment:
1. Location: BTL investors appreciate the importance of location. Whether that be dictated by the distance from the investor's home address or the demand for rentals in particular geographical areas. Savvy investors look for strong rental incomes and longer-term capital growth. They also consider the type of tenant they wish to attract. If it’s professional, then walking distance from a commuter station is a priority. For families, it's the property's proximity to shops, schools, and other amenities.
2. Rental yield: BTL investors often talk about the rental yield. This is the rental income received as a percentage of the property's value. BTL investors will calculate the expected rental yield for each property on their shortlist to assess which one has the potential to generate the highest returns.
3. Property condition: BTL investors will assess the condition of each property on their shortlist to determine how much work and expense will be required to bring it up to compliant rental standards. They will consider the property's age, the need for repairs or renovations, and potential maintenance costs. These must be considered within the cash you have available or the additional financing you seek.
4. Local market trends: BTL investors will research the local property market to determine whether the area is experiencing rental price growth or decline and whether there is likely to be high demand for rental properties in the future. If an area is rejuvenated or has new transport links, these will be prime for investor activity looking to get ahead of the market. When buying a BTL property, consider recent sales data if you wish to release capital later in life.
5. Financing options: BTL investors will consider the financing options available for each property on their shortlist, including mortgage interest rates, deposit requirements, and other fees. They will also assess the potential rental income against the costs of financing the purchase to ensure that the property is likely to be profitable. In addition, a Finance Adviser can help run the sums plus guide you through the comprehensive choice of products available to investors. This also includes insurance for damage to your property and rent protection insurance.
Benefits to working with an Investment-Find Expert
Start conversations early with a Lettings Agent who provides investment-find expertise. Here are five advantages to working with an agent when compiling a shortlist of potential properties and making your purchase:
1. Time saving: Our expert advisors will research and handpick a shortlist of suitable investment properties, saving you time and effort. They can accompany you on viewings to provide on-the-spot advice regarding the property's desirability and any maintenance that will aid a speedy let, and even arrange contractors to carry out the work.
2. Return forecasts: Our team will help maximise your returns by assessing the potential rental income, costs associated with bringing the property to market, annual running charges, and tax obligations. We can also provide rental yields for properties on the market with other estate agents.
3. Finance advice: Our experienced Financial Advisors will present the best BTL mortgage products for your needs. They can also recommend a range of insurance products that offer you peace of mind.
4. High-Growth potential: Our team offer insights into the local market; what type of properties are in high demand and what areas are witnessing strong yields and longer-term resale growth.
5. Hassle-Free tenant management: We handle the compliance and legalities once you have purchased the property. We help you market to tenants, manage the property 365 days a year, collect the rent and handle maintenance issues. Our services give you time to enjoy your life without the hassles of running a tenancy.
This investor’s article was written by Dominic Kleywegt, Group Lettings Partner.
“The Robinson Jackson Group is committed to providing the best investment opportunities for our customers. We understand there are lots to consider when narrowing your property search to the perfect investment, which is why we offer a range of services that benefit our customers in their quest. Our team of expert advisors has years of experience in the lettings & sales market. We aim to provide straight-talking advice, hassle-free solutions, and high-growth potential properties.”
Building a shortlist of investment properties carries risk. Still, with professionals in your corner, it will be an exciting experience with a rewarding outcome. Contact us today to discover how we will help you build a property shortlist that maximises your return on investment.
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