“If you’re looking for rental properties to start a nice little landlord portfolio it can be a real money-spinner if it’s well-managed,” says mortgage advisor Mike Collins.
But being a landlord is no easy task. There’s also the maintenance, tenants and money to deal with!
Right now, house prices are high and so are mortgage rates – so you don’t want to make a wrong decision about the property you opt for.
If you’re a new investor and keen to get stuck in, avoid these things.
Structural problems
Interested in an older property? Get paperwork about it wherever you can as poorly laid foundations could end up costing you a small fortune.
A good indicator that things are not well structured, are any large cracks or bulges in the concrete, as this may mean there is an uneven load on the foundation.
Flood plains and poor drainage
Take heed of these warning signs if you find either in a property you want to purchase. It’s always a good idea to check any recent work done to the pipes, drains or foundations.
Pooling water on the floor could indicate drainage is poor, or worse still a sewage leak.
Check basements for mouldy areas which should be major giveaways that damp could be breeding.
Mould patches
It may just look like unsightly black or green patches appearing on walls, but mould can cause severe illness in children and is so severe it can go undetected.
Often caused by poor pipework, condensation, water ingress, poorly lit areas, inadequate drainage or poor ventilation, even minor damp patches could erupt into something much more serious.
Infestations
A good indicator that you may be sharing your new home with some unwanted guests, is damage to the woodwork.
Check floors, skirting boards and particularly the attic. You should look for small holes or little tunnels as this can mean there is a woodworm infestation.
Repairing this – or worse still, replacing it all can cost thousands of pounds.
This should be picked up in a homebuyer’s survey, along with issues like damp or subsidence
Japanese Knotweed
This invasive plant grows up to10cm per day and costs the UK more than £40 million a year.
It’s very hard to remove but can damage buildings, as it attempts to go through weal cracks in the walls.
Where possible, Mike suggests investors observe photos of Knotweed carefully and spend time viewing the grounds before putting in an offer.
Houses on the market too long
A property that has been on the market a long time tends to suggest something is wrong with it.
If others aren’t putting in offers to buy, you can assume tenants won’t be keen to rent either.
Get some advice on the local area – perhaps the amenities are poor, crime stats are bad or there’s no local bus service.
It’s always a good idea to stay away from these types of properties unless you are experienced in property investment and are prepared to get stuck into a major refurbishment job.
No photos online
If you can’t see a photo of every room on an estate agent’s website, start worrying as there’s normally a reason why.
A lack of interior shots may mean the property is in poor condition or the rooms are disappointingly small.
Flipped properties
If you check a property’s sale history, you will soon see whether it has been bought, renovated and resold rapidly.
If that’s the case, it could be one to avoid as workmanship may be shoddy due to the quick turnaround times.
Be cautious when going through with a sale like this and gather any infrastructure paperwork.
High property management turnover
Check out how many people have managed a site. If the turnover is high, it may mean there are serious issues involved with the property. Perhaps there are high maintenance costs or landlords are unable to get the rental income they need for the area.
Consider a high turnover as a red flag as it may cause difficulties for you as the next landlord.
