How to ensure a property investment deal will work?

Nothing in property investing is certain or guaranteed, but there are some things you can do to set yourself up for success.

How about starting at the end and working your way backwards?

It’s a given that you ought to have a number of exit strategies in mind before you buy an investment property. Taking just one of these, the Buy-to-Rent or Buy-to-Hold strategy.

Who are your ideal tenants?

Say you are seeking long term professional tenants as a family unit. What type of property will they be attracted by? And what is their rental budget likely to be?

For a family with parents who commute into a city centre to work, then number of bedrooms and proximity to transport links are likely to be important factors. Whilst studios or 1 bed flats or a HMO will bring in higher yields, you will be trading off a more modest yield for other factors such as minimising voids, longevity of tenant and potentially lower operational costs; refurbishing or sprucing up between tenants as well as no leasehold costs (usually). Other factors might be the quality of the neighbourhood, proximity of local shops and medical facilities. And let’s not forget broadband in the current era of home-working, it has become ever more crucial for parents as well as children. And so has air pollution become an important factor for many households, which can be found on sites such as https://uk-air.defra.gov.uk, and cycle routes at https://bikemap.net.

Due diligence ahead of buying will pay off

Due diligence is really about researching and checking things out. Contacting local lettings agents who will have insights into what lets really quickly and what is in short supply. I remember a field trip to Harrogate last year on a due diligence trip and heard a good letting agent inform a developer that the town was short of 1 bed homes just at the point a developer was about to invest in another property. That helped shape her decision on which deal to go for, an HMO. Letting agents may even be a source of referrals to landlords thinking of selling up.

You can use online portals and tools to give a dipstick overview of demand e.g. Rightmove, by checking numbers of 2 or 3 bed houses To Let and Lets Agreed to get a measure of the levels of supply and demand.

Is it mortgageable?

It’s also worth bearing in mind what is and isn’t easily mortgageable. For the most part there are more issues with flats than houses, but still some houses of Non-Standard construction or some ex-local authority stock can be problematic.

If you would like help finding the right buy-to-hold property for you then please get in contact.

I work with time-strapped expats and entrepreneurs who don’t have the capacity, local presence or gaps in their know-how to build property portfolios in the right way for them. (Or who are simply stuck with little progress). This means you can carry on your day-to-day lives without spending disproportionate time getting sucked into investing.

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