Choosing the right rental property is a critical decision. For one, you need to invest in a property that will be cash flow positive, which simply means a property that will help you earn profit every month. Also, you must invest in a property that will solicit a high demand. You could buy a spacious and stunning rental property in the outskirts, far away from civilisation, but the odds of finding a tenant might be very low. As per the estate agents in Ilford, here are some tips and a guide to buying the right investment property in the UK.
Rely on the figures
Before you even think about investing, you need to do the math. Figure out exactly how much money you can afford to spend on your new investment and how much money you will make off your new investment. And make sure to account for hidden costs and unexpected expenses. Remember, the figures never lie. You should plan your investment strategy based on the numbers.
Always remember, location matters
The location and neighbourhood are two critical criteria to consider while buying property, especially in 2021. Due to the Covid-19 pandemic, many people are choosing to move away from the city centre. Hence the demand for properties in the boroughs and outskirts has gone up tremendously. If you buy a city-centre property in 2021, you might feel that the market is not very high. Similarly, if you buy a property near a university, the main population will be students. A property close to transportation hubs and transport links will have a higher demand than a property far away from civilisation. Also, factors like crime rates, the neighbourhood, the closest supermarket and distance from the city play a significant role. In essence, the location matters.
Find out the average rent in the area
Before you start looking at properties, find out the average rent in the area. If there are many rental properties in that area, the average rent will be low because of the high supply. On the other hand, if there are a few rental properties but the demand for rental properties is relatively high, the rent will be hefty. Therefore, it is important to choose a property that allows you to profit from the rent, which means that the monthly rent should be more than the monthly expenses and upkeep of the property. Then, based on the average rent of similar properties in the area, you can decide whether the investment is worth it or not.
Consider the different property types
There are many different properties that you can invest in. One is a residential property which is essentially a buy to let property. You can also invest in mainly student-centric properties – these are essential apartments and spacious houses that are close to universities. Another investment option is commercial property. And finally, you have holiday investments that can be given out on websites such as Airbnb. Understand the different types of investment opportunities available and choose the one that suits you.
Understand the demand
Before investing in a property, try to understand the tenant demand in that area. For example, if you are investing in an apartment in a city centre, it is wise to buy a one-bedroom apartment to attract professionals and workers. However, a one-bedroom apartment in a school district will not have too many takers. Similarly, a three-bedroom house in a school district will be in high demand, but it might not be so popular in the city. Therefore, it is important to invest in a property based on the need and demand in the area.
Know the needs and wants of the tenant
Due to the Covid-19 pandemic, the demands of the tenant have changed significantly. Now, most homeowners and tenants are looking for properties with outdoor spaces. If you are thinking of investing in a rental property, try to find a property that has a small garden, an outdoor patio or even a terrace garden. Also, many tenants and potential buyers are now looking at properties with spare rooms and bedrooms to create a home office. If you are thinking of buying a three-bedroom property, consider investing in a four-bedroom place or a three and a half bedroom property instead; before you list the property online, convert one room into a home office to attract more tenants.If you are looking to buy an investment property in 2021, get in touch with estate agents in Ilford today.