Investment property wish list

[Twizbe]

For anyone who has purchased an investment property, what did you look for?

What are the must haves for an investment / things to avoid.

Thanks

Who are you aiming to let to? If a family, then near a good school, if students then near a university. Young professionals? Central near transport.
Other than that you want it to be either on fairly good nick or if a project have the funds to make it DECENT, not just the cheapest kitchen and cover up paint job.
Two beds best for a couple, three for a family (if good size third bedroom) plus a garden.
I'd avoid really busy area on a main road with no nearby amenities. I'd avoid a neighbourhood with mainly older people (they may object to noise). I'd be wary of a flat with dodgy communal areas.

That's really helpful a we're aiming towards couples / flat sharers. We've picked a town with east links to a nearby university city.

My mum keeps suggesting villages near this town, which while lovely for us to live in, I'm not sure would rent well.

Ideally not a project either. Really we want a quick turn around with a deep clean and minor works.

Have a chat with local estate agents - they will know the rental market in the area you choose and what type of property is in high demand. I bought a 3 bed end of terrace in a very ordinary part of a small town, and it was rented out immediately by a family who are still there 4 years later - they’ve put roots down and their kids are in the local schools etc. Very stable tenants. I was advised by estate agents that 3 bed properties were in high demand in that area - he said there was a glut of two beds that they couldn’t find tenants for as market was saturated, and families were in need of rental homes. So in short - know your market before you buy.

A friend of ours who has lots of investment properties says he always goes for closest to station/public transport and no/low maintenance garden.

Thank you. I've got some meetings tomorrow with lettings agents in the town we're looking at.

I know the town well as I grew up there but haven't lived there for a really long time.

3 bed modern property (house - freehold) with a high EPC rating. Close to schools/ transport.
Requiring only redecoration, not structural work (the minute you own it you will start incurring bills e.g. council tax/ water etc).
Low maintenance garden. Driveway.
Near where we live as we were going to personally manage it.

Be careful if you go for flat-sharer/ students instead of a family as you may need an HMO licence! (Check with the relevant council). HMOs tend to have different legal requirements.

@Whippet that's a good point. I thought it was only if 5 unrelated people in the house.

I'll check on the council website though.

It's usually 5 for the full HMO rules, but sometimes there are extra requirements for as few as 3!

That's really good to know. I'll add that to the list of things to talk to the agents about.

I've got three properties lined up to see. Two already have tenants so it will be interesting to hear what their rents are.

The agent I spoke to said that letting in the town is going well at the moment.

I would only buy somewhere within easy travelling distance to your home. Its a nightmare trying to sort trades out when you live at distance. You can save a lot of money doing viewings, check in/outs etc if you are local.

That's why we're looking at the town we are. My parents live there and I grew up there. It's easy for us to get to as well.

I saw a few properties today. One my mum loves but I'm not sure it's right. One I like but it needs some work.

Buying a rental property is very different from buying a house for yourself, to a certain extent, the rental price of a 3 bed is fairly fixed (by area or by having a garage, a garden etc) so decor, fancy fittings or a beautifully stocked garden may increase the purchase price, but it probably wont result in a higher rent.

This is what I tried to say to my mum. The one she liked was lovely but in a village so harder for us to service.

The one I like does need a new kitchen and carpets. Both seem original to the 80s construction. But it has very solid bones, is cheaper, already has a tenant and is in the town. But that £15k off the purchase price means we can spent a couple of grand on a new kitchen.

how much does the tenant pay now? and how much would they/someone pay for it with a new kitchen and carpets?

Your heart always wants to make it look beautiful, but this is a head decision and it needs to be safe and comfortable first and foremost

Would you increase that tenant's rent if you put in a new kitchen and carpets? How would they manage to cook while the kitchen is being fitted?

Do you think your mum is looking at it as a place that you might live in eventually?

The letting agent is coming back to me on potential rental increase with a new kitchen. There are some tiles missing on the splash back and a couple of broken handles so they need fixing regardless.

The current tenant is planning to move at the end of their lease which is later this summer. The current owner thought that would be a good time to sell as well. It would potential mean it's unlet for a bit which we'd have to factor in. The rental market is very hot in the town at the moment so it would be easy to rent later.

I think so. My mum would love us to leave London and be closer. She just cannot understand why we like living in London.

Top tip - when you start getting quotes for things don't tell trades straightaway that it's for a rental property, as in my experience they add on at least 10% to quotes!