In short, we at Martin & Co believe it is still worth becoming a landlord. We have a new set of Marketing Intelligence Reports available for free download which will give you a real insight into how your local rental market is shaping up, and your expected returns on a buy-to-let investment. Please contact me on 01603 766860 to receive your copy.
However, if you would like to get my own opinion on how you can get yourself into the buy-to-let market, read on. I'll outline the process of finding your property, give you the three cardinal rules you need to follow, and give you the confidence to make the move you have wanted to make all this time.
Firstly, before anything else, sit down and carefully assess your
investment goals. When you break it down, this is actually quite simple. Ask
yourself, do you just need your investment to pay you a regular sustainable
income? Or, do you want the value of your investment to grow, or, would you
like a combination of growth and income?
The answer here will determine what property type you should be investing in and where you should be buying it. Clearly an important aspect is how much do you have to invest? But equally important is whether or not to raise a mortgage on the property as part of the purchase exercise. The arithmetic can seem complex in assessing this (depending on your investment goals) but generally speaking adding a mortgage to an investment property is a good thing and should enhance your returns.
Let's suppose you would like to achieve sustainable income with capital growth and enhance your returns and, therefore, you're willing to raise a mortgage. That's going to steer you towards buying a 2 bedroom house most likely.
Why? Before I answer that, rule number one . ignore the myriad of
people offering something for nothing and other assorted get â€œrich quick from
propertyâ€ schemes. If you don't, you'll end up ignoring the fundamental rules
of property investment!
Right, where were we?! 2 bedroom houses are the most popular and most in-demand property type among tenants so, to make this work, you need to keep your property tenanted as much as possible . therefore you must buy the property that's always going to be in demand.
Where to buy it comes next, but first, rule number two . a selling agent will often tell you what you want to hear so take their words with a pinch of salt. The good news is that generally speaking Norwich and its suburbs are very pleasant places to live and offer a good choice for the would-be landlord.
From our experience, the most requested locations are (in no particular order) The City Centre, Golden Triangle, North City, Sprowston, Thorpe Marriott, Catton, Old Catton, Three Score, Dussindale, Costessey and The South City. Pretty much everywhere, then!
Next comes the exciting bit, but it can become boring very quickly . viewing potential houses. Decide where you want to focus your property search and then start trawling through the property portals, such as Homes 24, On The Market, Rightmove, etc., to draw up a long list of possibles. You'll have to do some 'window shopping' and check out a few letting agents to get a feel for what services they have to offer and to determine who you might want to engage to act as your partner in your new lettings business.
Once you've got your long list, ask your preferred partner to give you a 'desk-top' assessment of each to help form your official shortlist. Then comes the excitement of going to look at them. Other than re-reading Rule number two, our advice would be; don't 'buy' on first viewing and don't be hurried into buying. A good way of assessing whether or not a house will make a good rental investment is to ask yourself a simple question: â€œwould I be prepared to live here?â€
If the answer is 'yes' then so will many others. This process will weed out the duds and help you decide if you can continue with your shortlist or whether you need to start trawling the property portals again.
If the latter, this is when it can get boring . but don't give up, you need to find the right property for you and the right property for your tenants. Putting in the time and research now will help you avoid serious problems further down the line.
Repeat the process until you have a final shortlist and ask your preferred partner to undertake a second viewing with you to critique the property in the flesh.
Rule number 3 . You must ask your partner to do an accompanied
viewing. There is no point taking your newly acquired house along to the
letting agent and watching them wince when you tell them what you've bought.
More likely than not, your final shortlist will only have one house on it anyway and once we've critiqued it for you, we can help shape your offer, recommend a good firm of solicitors, surveyor, mortgage broker etc. Just be a little circumspect here, if it is Martin & Co who is your preferred partner, you can be assured that we do not receive referral fees from these other service providers but many agents do and, therefore, they may not have your best interests at heart.
Here's hoping this article has given you the insight and enthusiasm to take the next steps. As always, give me a call on 01603 766860 for a chat about what we can do for you.