Investments

With potential yields of 10% or more it is obvious to see why there has been an upsurge in recent years in buying property to let out primarily to students. Most UK cities nowadays have a great need for student accommodation making buy-to-let a most lucrative business in which to invest.

Also it is now easier to obtain a mortgage on this type of property. However, a word of warning, if you are a novice landlord\lady it is often advisable to employ a professional letting agency to deal with your tenancy investment! Here below we give you some helpful advice and guidelines to help you in your search for the right property to start you on your personal 'property ladder' of success.

Finding the Right Buy to Let Property

What Type of Property Should I be Looking For?

Before you buy - you must consider various options of WHERE to buy - village, town, suburbs of city or city centre location. The ideal location would be near to local transport and somewhere convenient for shopping, and not far from bank facilities, chemists, cafes, bars restaurants etc. There are many types of property available for letting purposes it all depends on WHICH tenant market you are aiming to attract.

Flats \ Studio Flats

These flats often have parking places available , but it's not guaranteed. They are popular with professionals to use as a city work-base from Monday to Friday and then commute home for the weekend. They're also popular with students as the rents are often lower - thus usually all they can afford to pay.

One bedroom apartments

These are ideal to rent out to students and professionals alike especially if located close to a university or an inner city area. The big drawback is that often there is no provision made for parking.

Two bedroom apartments / Small houses

These seem to be the most popular of all - ideal for students, professionals, couples or two flat-mates sharing. Often has parking facilities available and sometimes a garden - making it suitable for family with young children.

Large houses

These are extremely popular for multi-occupancy rentals especially if located close to a university or college. Are ideal for a group of friends to share together and also approved by large number of sharing individuals. (Seven bedroom lets seem to be extremely popular at the moment.)

Student Letting

Key points when letting to students

• Property needs 'kerb appeal' - first impressions count
• Must have good general appearance with up-to-date fixtures and fittings and stylish furniture. Good quality flooring - hardwood very fashionable and durable - and high standard of window dressing
• Internal decor needs to be welcoming and give an impression of space - achieved by subtle use of natural textures and neutral shades - to give clean, bright and airy look
• Needs bright workable kitchen with stylish units and high quality appliances. Will be even more appealing if there's space for eating\dining facilities
• Needs large double bedrooms, preferably with good quality carpets
• Needs good sized bathroom \ shower room and preferably separate WC
• Advisable to have gas central heating to guard against any potential damp and condensation problems
• Better to have double glazed doors and windows- more secure, cuts down on heating bills, keeps out noise
• Essential to have good security system in place - locks, PIR lighting, fire alarm, smoke alarm, carbon monoxide alarm, burglar alarm, dry powder fire extinguisher and fire blanket in kitchen etc
• Plumbing needs to be up to scratch and inspected regularly as there will be high demand from tenants in respect of showers, washing machines, central heating boilers, and dishwashers etc. Do not just buy cheap white goods as this will be false economy in the long run.
• Preferable to have a garden or off street parking.

Why Buy to Let?

The Potential of a Buy to Let Investment Property

There are considerable gains to be made from owning a property and then leasing it out rather than living in it. With this incentive in mind you have the potential to become a successful business man\woman in today's rental market. However it is not as easy as that and in order to succeed as a landlord\lady it is essential to consider your own personal skills and abilities.

You need spare time in which to investigate the local rental market and to present your property ready for letting.

Good communication skills are essential when it comes to dealing with others.

You need to be an organized person to be able to manage your property portfolio, rents, bills, taxes etc.

You need to be assertive when meeting the challenges that lie ahead and also when faced with new situations. You must ask yourself this following question:

Are you able to TAKE RISKS? ........ as there are a number of risks and potential pitfalls - including - house prices may fall or the rent is not sufficient to cover your mortgage repayments - tenants may be in short supply or may fall behind with the rent - you may have to sell the property etc. (Of course you can always reduce the risk \ hassle by employing a letting agency deal with your property - if you have little or no experience of the property market this use of professionals gives you an opportunity to learn the ropes whilst they do the work for you.)

In order to understand the legal aspects of the letting process you need to have the ability to consult others and to be prepared to ask for advice. And to act on their suggestions!
You need to be aware of Health and Safety issues and to be a responsible person for installing safety devices etc.

You also need to be able to ask for and take advice on taxation issues and be aware of the two types of tax connected with the letting of property.
You must be open to receive good advice - act on it - and to learn new processes \ techniques and skills.

Very important - you must stick to the rules and regulations - no cutting corners - and be FAIR, FIRM and FRIENDLY in all your dealings, especially when faced with confrontations!

Apartments vs Houses

You need to understand the potential profitability of your buy-to-let and be aware of the factors which can affect this profitability - factors such as whether to buy a HOUSE OR APARTMENT.

Houses

With HOUSES you can make a large steady income, as a house will usually let for a larger rent than an apartment. Location is everything -- in rural areas a house with a garden would be a valuable asset and more in demand than an apartment by students. However do bear in mind that this garden will need to be adequately maintained - by you the owner - during the empty periods of the let.

Houses give more space and more rooms which in turn means that groups of students will be attracted to the property - as well as professionals and families who may prefer to rent and settle down in a large house rather than buy their own smaller house.

Apartments

Whereas APARTMENTS often attract a more itinerant population - thus they are more in demand - especially in city centre locations. Apartments usually are less expensive to buy and therefore potentially easier to re-sell if and when necessary. Apartments are usually smaller - need less in the way of carpets and furniture - require less maintenance, less initial outlay and less annual out-goings.

An apartment with a balcony is much easier to maintain than a house with a garden. Upper floor apartments are known to be safer and more secure - especially during the empty periods between lets. However the down side of this is that you are dependent on the neighbours being thoughtful and quiet - above and below you -. and on each side of you. They can make or break your peace and quiet and your quality of life.

Apartment blocks may require you to pay a service charge for maintenance, general upkeep of the property and paths, hedges, lawns etc. whether occupied or not. Usually the external appearance of the apartment block - entrances - communal hallways - stairs - lifts - will be dependent upon the management association\ company whereas a house is usually controlled by you the owner of the property.

We hope you appreciate these guidelines as an insight to the various pros and cons of buying your property to let- and have found them useful. Obviously it's up to you to decide whether to go for investing in a house or an apartment.

Good luck in your choice and please remember us at Providence Properties and our promise to you 'Trust in Providence'!

Investment Property

As an alternative venture from buying a house \ apartment to let - you could consider buying a property that has a low market value because it is in need of considerable repairs \ renovations. It will have an appeal maybe to the novice landlord\lady because of its low purchase price but could be a fundamental mistake which may lead to a financial burden.

To avoid such a situation you need to get the right advice on your investment.

Do not submit an offer until you have obtained a fully comprehensive and complete survey which identifies all the faults ...... and been given an estimated cost of repairs \ renovation from a reputable building contractor.

Be aware of the lack of earnings whilst you are having the property repaired. Also be aware that you will be expected to pay for Council Tax, any service \ maintenance charges, and any gas and electric charges incurred during this period of repair.

If your 'investment property' is in an area of similarly dilapidated dwellings it could decrease your chances of successfully letting your renovated property.

It may be also harder to acquire a mortgage if your property is in a poor state of repair, as well as being in a run-down area..... or you may be offered a lower amount of loan than you need.

Also important to know is that if your property is classed as HiMO ( House in Multiple Occupation )it will be a legal requirement to have a satisfactory fire escape, a range of other fire safety measures as well as requiring various other standard features. All of which cost a considerable amount of money. That is why some owners are now selling off these dwellings, to avoid the outlay on such necessary long-term improvement costs, as soon as their property becomes vacant.

Our advice to all prospective 'investment property' buyers is to be aware of all the dangers - be vigilant and please take care! Trust in Providence.