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1. Target Tenant Profile
Having a target tenant in mind and knowing the pros and cons of each tenant profile before purchasing is essential. For example, if you are aiming towards students, have you considered the long vacant periods and the short advertising window? Knowing your target tenant will influence location, type of property, chosen rental agency and rent charged.
2. Location
Research the area with your target tenant in mind; How good are the transport links, what kind of reputation do the local schools and universities have, how far is it to amenities, are there any future investment/ regeneration plans, is there rental demand? Take a walk around the area if you can, it is the best way to get a real feel for the location.
3. Taxes and Insurances
Know the taxes and insurances associated with buying and tenanting a buy to let property. You are likely to have to pay stamp duty when purchasing and once your property is tenanted there could be income tax to pay on your rental income, along with the annual costs such as landlord and building insurance.
4. Legal Responsibilities
To be legal and compliant, you must obtain several certificates and checks, e.g. Gas safety certificate, Energy Performance Certificate and Pact testing (If you are providing electricals) If you are managing your own property there are extra considerations e.g. Tenancy deposit protection. Purchasing from a developer? They should provide you with many these certifications and warranties, ask the question.
5. Benefits and Risks
Buy-to-Let’s can be a solid long term investment option offering regular income and sizable future gains, however an unpredictable property market and risks such as vacant periods or problem tenants must be considered. Selecting property based on yields, making rental income a big part of your total return and being realistic about initial and ongoing costs will ensure you make the right investment choice.
The Heaton Group Solution
The Heaton Group team do everything we can to mitigate the risks associated with Buy-to-Let property before you invest. By always targeting our properties towards working professionals we always have a clear idea of the type of property that we develop (Premier HMO’s and one and two bedroom apartments) and ensure that they are located within walking distance to transport links to town or city centres.
Before developing an investment property, our in house rental agency run a rental demand test of the area using online property portals and social media - this gives both us and our investors that the property will let quickly when complete. We know what a headache Taxes, insurances and Legals can be and guide investors through each stage, passing over to independent advisors where necessary. Upon property completion, all our investors receive a pack with all certification and warranties, this along with a guaranteed rent period and an in-house Property Management team, gives as much security as possible throughout the process.