Residential lettings specialist Belvoir has prepared a checklist for those wanting to make a success of an investment in residential rental property.
It says you should: Research your market – the area, the people you want to rent to, the available property, the benefits and the risks.
Choose your preferred tenant type. Students? Young professionals? Families?
Find the right property that will appeal to them – houses, flats, older properties, newer builds?
Pick the right area where they want to live – parents may want to be close to schools and shops; wage earners need to commute to work; students have to be near to their college or university.
If local crime statistics are available, take a look and bear them in mind.
Study the condition of any property you are interested in – from roof, guttering and windows on the outside to condensation, leaks and electrical wiring on the inside. Be conscious of fire risks.
Don’t accept the first mortgage offer you get. Shop around.
Is the rent you expect to get enough to cover the mortgage and give a profitable return? Does the potential capital growth add up to a good investment?
Talk to an independent lettings agent before you buy. Most mistakes involve either wrong location or wrong price paid for a property.
Be prepared for costs that can upset your calculations – small and major repairs, advertising, future rate rises, mortgage costs, agents fees, tax, falling house values, periods when you can’t find tenants and the property is empty.
Get the right insurance cover.