The main priority you should have as a landlord is investing in a house that will be in demand for people looking to rent. Depending on the location, most people want a good return for their money – they’ll either pay very little for not very much or they will want to pay competitive prices and have a hassle free, nice clean and working home.
So, first you’ve got to decide what sort of Landlord you want to be, do you want to rent your house out to families, students, young professionals or older couples? Once you’ve figured this out, you can start looking into whether a new or old property is going to pull you in the most money. You are better off looking at the young professionals, families and older couples categories for the best return on your money. Student housing requires lots of regulations and tends to receive a lot of complaints, insurance trouble and more hassle in general. Student housing landlords tend to own more than one property and keep them all at a basic level of liveable condition to keep maintenance costs down.
Before you start looking at properties, the best thing to do is decide on a hotspot area then get in touch with local estate agents for advice. London is still very much in demand with statistics showing that the average rent for London and the South East costs more that 30% of the median take-home salary for the area. However, it’s tricky to get your hands on property to rent out in the first place in the top hotspots. It’s best if you chat to a professional to understand your position and someone like Jason Harris from First Urban would offer you some expert advice on where best to put your money to get the best income.
The benefit of a new property as a landlord is that you have a ready made package. Despite buying the house at its highest value, meaning the chance of making a profit through a re-sell is slim, the property is ready to start making you money through rent instead!
As a landlord, you shouldn’t have to invest any money into a new property prior to renting; it’s essentially ‘ready to go.’ On the other hand, you could buy an attractive old Victorian property that you could make money on through renovation but while you’re spending you’re losing out on rental income. Older properties also tend to be less efficient than newer properties as they have old fashioned boilers and electricity. New homes tend to be a lot more efficient as we need to look after the environment so therefore saving you running costs.
If the property is brand new it’s worth looking into the developers’ agreement, sometimes you won’t have to pay any maintenance costs in the first 10 years which could save you a fortune!