Location, a key factor when investing in property
Location is one of the most common misconceptions with buy-to-let property.
Many new investors want to invest in property in their hometown or close by however, this is not always the best way to maximise return.
Investing locally may not always be the best route for many reasons. An investor’s hometown may have a combination of high yields and capital growth or may not suit the market a landlord wishes to target, for example young professionals will want to be close to good transport links and amenities.
A buy-to-let property should be considered as a business, with logical not emotional decisions, to ensure it produces the best return.
Property Reporter have suggested some tips for buy-to-let investors to take into consideration when purchasing an investment.
Be a hands-off investor
A good letting agent is often key to the success of experienced landlords. Employing an agent to manage an investment will remove the need to be close to the property. They will also regularly carry out property inspections and help resolve any minor issues to ensure landlords can reap the financial rewards.
Tenant demand is a crucial factor to all buy-to-let investments. Landlords will want to purchase in an area that has a high demand for renters to minimise potential rental void periods.
Purchasing a property with a tenant already in situ can result in an income-generating investment from day one.
Letting agents can provide investors with details on rental prices and tenant demand in the area, which can help in making an informed decision on where to invest. It is wise to obtain this information from an agent before purchasing a property.
Keep an eye on house prices
Capital appreciation is a key element for investors to consider, alongside rental yield, to ensure their investment benefits in the long term from rising house prices. In some areas property prices will not grow as fast as others, which is why investors often seek to purchase property in city centres or suburban towns.
House prices in Manchester have increased by 8.4% in the last year, allowing many landlords who invested in the area, or areas with similar house price growth, to reap the financial rewards. An agency can assist landlords by advising them on likely house price growth with many helping investors track down future hotspot areas to invest in while prices are still low.
There is no ‘one size fits all’ model when it comes to buy-to-let property. Landlords looking for a hands-off investment that will generate maximum income, are recommended to do the necessary research on their future purchase and take note of how location and other well known ‘tricks of the trade’ can make a significant impact on their returns.
Full article available on Property Reporter: http://www.propertyreporter.co.uk/graham-davidson/why-location-is-everything-in-buy-to-let.html