Buying An Investment Property For Rental
If you’re thinking of buying an investment property for rental, there are many things to consider. Assuming you’ve organised your finances and can afford to do the transaction in the first place, then it’s a case of finding somewhere that’s going to prove popular, in order to provide you with a regular tenancy, decent income and a good yield over time.
Here is our guide to selecting the right type of property for your prospective tenant:
Consider Who Your Property Will Appeal To
There are many categories of renters, and for every one, there will be specific areas of appeal. Here are some to consider below before you purchase your investment.
Students
The golden rule here is to find somewhere near to a college or university where the income will be guaranteed. If you let to one or two students, then it’s fairly straight-forward. If you let to three or more, then it becomes a high multiple occupancy (HMO). Check with your local council if you need to apply for a licence for an HMO: https://www.gov.uk/house-in-multiple-occupation-licence
Young Professionals
Likely to be drawn to smaller properties like 1 or 2 bedroom apartments. Somewhere central is always popular, near to restaurants, bars and nightlife to relax in after a hard day’s work. Purpose-built apartments are always a good bet. This category are less likely to be interested in older properties with character – their lifestyle is quick and fast, so they like clean and easy spaces to live in.
Growing Families
Schools and nurseries are a vital consideration here. If you own a property near a good school, then it’s likely people will move into the catchment area in order to get their child a place. This can be very lucrative, but of course, will reflect in the purchase price of your property. A decent garden will always be appealing too.
Downsizers
Many older people may be considering moving out of their homes, cashing in their profits and entering the rental sector. Somewhere accessible and safe would be the main consideration, with good transport links, shops and access to doctors and a hospital. And don’t forget – bungalows still have timeless appeal for the older generation.
Trendy Urbanites
This category enjoy the arts, café culture and gigs. You’re likely to find them at the local farmers market at weekends, or the art gallery or theatre. They would be drawn to converted loft apartments, or quirky homes with character, in up and coming areas. You can identify these areas – look out for regeneration, cafes springing up, community hubs and the like. It’s still possible to buy property for good prices in these areas, and reap the rewards as things get better.
