When you start looking into buying an investment property for the purpose of letting, there are a lot of things to consider, from the location to the resale value but what about the property type?
When it comes to choosing the type of buy-to-let property to invest in, you need to let your head take over from your heart. This is an investment that needs to appeal to a wide range of people with different tastes and preferences.
Rental yield is an important factor when considering what type of property to invest in. It determines how much you’ll earn from a rental property compared to the property’s cost. If you’re looking to make money from your investment in the short to mid-term, rental yield may well be your focus.
Here’s our top five tips on what to look for in a buy-to-let property, so you can optimise your return on investment.
1. Multi-unit properties
It has recently been found that houses of multiple occupation (HMOs), which can be defined as a rental property that is shared by three or more tenants who are not related, has brought in the highest rental return.
However, if looking to invest in this type of property, a HMO license is required, which can be a long and complicated process.
2. Best number of bedrooms for rental income
If looking for a property that doesn’t fall under the HMO definition, what number of bedrooms is most desired? It was found that of all properties, two bedroom houses currently offer the best rental yield. On the other hand, for one-bed properties, flats are more popular than houses.
3. The right interior
Having the right décor and design for your property can have a large influence on rental potential. Keeping to the times by having a new modern bathroom and kitchen is going to help you rent your property.
Prospective tenants often look for trendy homes with all the new trimmings, and are willing to pay for it. By revamping your property every few years, you can almost certainly be guaranteed a good rental.
4. Outdoor spaces
More often than not, your tenants will prefer having some type of outdoor space. Having a small, neat and easily maintainable garden or veranda will make your property desirable to most.
Depending on your tenant target market, the type of outdoor areas wanted may vary. Young families would appreciate a little garden for their children to play in, whereas for young professionals having somewhere to do a bit of entertaining would be great.
5. Easily maintainable
Keeping a property up to date and well maintained can be pricey, but like we mentioned earlier, prospective tenants are willing to pay more for modern properties. By investing in a property that is easy to spruce up and look appealing, you will save costs in the long run. It would therefore be a good idea to look into investing in newer buildings as they are likely to have less long term costs.
Before investing in a buy-to-let property, it is important to do your research. By knowing what prospective tenants want and need you can make your investment work well for you.
We hope these few tips help make the decision as to what buy-to-let property to invest in just that little bit easier.