3 Things to Look for in a Buy-to-Let Property
3 Things to Look for in a Buy-to-Let Property
With rising property prices and a buoyant rental market, more investors are entering the buy-to-let market than ever before. From competitive capital growth to short-term returns and promising forecasts, the opportunities within the UK property market are at the root of its popularity.
Regardless of whether you’re a first-time investor or seasoned property professional, knowing what to look for in a buy-to-let property can be one of the most challenging parts of investing. Not only are tenant demands constantly evolving, new property trends are always emerging, so knowing what makes a successful buy-to-let can be difficult in a landscape that stays the same.
That said, there will always be some ‘safe bets’ in the world of property. Joseph Mews, a leading UK property investment company, has highlighted three things you should be looking for in a buy-to-let property:
Of course, an important part of investing in buy-to-let property is considering the local market, and while it’s crucial to look at the current landscape, it’s also important to look to the future. Here, you’ll want to get an idea of what employers are already in the area and whether any more are due to relocate in the coming years.
With more than 50% of UK employees willing to relocate for their jobs, a healthy jobs market could be the difference between void periods and renting out your property. Additionally, a strong employment base often translates into a more successful economy.
For example, if more businesses are relocating to an area, this will not only entice more professional workers, but they’ll be directly contributing to the local economy. Typically, this will then encourage further investment into the city. By highlighting the potential of an economy, this attracts both more businesses and often encourages additional regeneration schemes across the area.
Transport links and employment opportunities often go hand-in-hand – if an area houses a variety of employers and jobs, the chances are, it will attract more transient tenants. If an area has exceptional transport links but lacks in the employment department, there will probably be a lot of outward commuters.
This is why successful buy-to-lets usually strike the perfect balance of these two key factors. When you’re considering where to invest and what to look for in a location, you’ll want to look for opportunities to travel by rail, road and air.
Having a property within close proximity of a rail station can make a world of difference to your buy-to-let, especially if the property doesn’t come with a parking space. A recent report showed that half of all journeys made by rail were for work purposes, and for those without access to a car, these transport links are non-negotiable.
There are several locations across the country that benefit from exceptional transport links, but Derby is a prime example of this. Located in the heart of the East Midlands, this city is renowned for its transport links. With a rail catchment of over 800,000, Derby is not only a hub for inward investors but it offers connections across the country, making it a hub for young professionals and graduates.
Also known as emerging locations, regenerative areas are property goldmines for investors. Regeneration schemes signify a wealth of different things, from economic growth to population increases and new amenities, all of which have endless benefits for the local property market.
Generally speaking, these rejuvenation projects focus more on underdeveloped areas and focus on overhauling public realms and amenities to meet the demands of an evolving population. While it might seem more logical to invest in areas that have already undergone regeneration, it’s this process that makes for a potentially lucrative investment.
Areas that are in the early stages of a regeneration project typically offer lower entry prices, with these locations usually being underdeveloped and outdated. However, these multi-million pound redevelopment schemes usually catalyse price rises across both the sales and rental markets.
As these projects continue, they typically entice more employers, tenants and investors to the area, which drives the demand for property. This means that properties will usually increase in value over time as the area becomes more popular and as economic growth continues.
When it comes to these emerging locations, off-plan properties are prime investment opportunities. Investing off the plan usually comes with lower entry prices, and as these properties complete alongside the area’s regeneration schemes, they will typically be worth a lot more than the original purchase price.
Investing in buy-to-let property comes with a lot of considerations, from the finance side of things to actually being a landlord, but one of the most important is knowing what to look for in an investment property. There are many different things that make a successful buy-to-let, with regeneration projects, a strong employment market and exceptional transport links boosting the local economy and enticing more tenants to the area. Translating into an increased demand for rental property, these three considerations are the staples for buy-to-let investment.