Becoming a landlord and investing in property has proven to be a lucrative move for many, but as with any big investment it is essential that you approach it with your eyes wide open, acknowledging the potential advantages and disadvantages. The more knowledge you have and the more research you do, the better the chance of your investment paying off. Below are some key points to keep in mind before getting into the property investment game, outlining what landlords should look for in a buy-to-let property. As estate agents working in the rental sector, we’d be very happy at Caledonia Bureau to sit down and talk about any plans to move into property rental and advise on how to get the best from any investment.

 Find the best area

Perhaps an obvious point, but an important one – before looking at specific properties it’s a good idea to get a feel for a variety of areas first. It’s not just trying to find the most expensive or cheapest areas but places that have a certain appeal and that have the most promising prospects.  Somewhere that is up-and-coming can provide a chance to catch a bargain whilst in the knowledge that there is increasing interest and desirability to move to that area. It’s a good idea to not only check out the property value in an area but to go and take a look around too, thinking carefully about the pros and cons of the location and how well rented property would perform there. As a local estate agent, we at Caledonia Bureau, have extensive experience and are in a perfect position to advise on potential areas for your investment. 

Consider your target market

When you get to the stage of viewing property, remember that it won’t be you who is staying there so keep your target audience firmly in mind. Who are they and what are they looking for in a property? If you are near to a university or college, renting to students is a great idea and the properties you are viewing will need to be comfortable and clean but not luxurious. You might need to offer them furnished or part furnished too. If you are looking in a popular family area, the properties need to have enough space, with 2 or more bedrooms, and be near to schools and local amenities. Young professionals might be looking for more luxurious finishing touches and proximity to transport links and nightlife. Deciding on the area and target market are the most important decisions that will influence all the other steps of the buying process, importantly, who you want your future property to be rented to and how much you’re going to rent it for.

Fixer-upper or newer build?

Consider how much time and money you have to invest in a property before you move tenants in and this may shape the decision on whether to buy a property that’s in move-in condition or one that’s needing updating.  Obviously there’s less work to be done in a newer property, you will have paying tenants in quicker and there is less chance of having to invest in maintenance needing done in the future. However, it is also worth looking at properties that need improvement as a way of boosting the value of your investment. The price of outdated properties or those needing renovation can often be successfully negotiated, leaving you with a bargain to then spruce up and add value to. Adding value to a home straight away also gives you a greater margin of safety on your investment if the price is low enough to cover refurbishment. A good rule to follow is the property developers’ rough calculation, where you want the final value of a refurbished property to be at least the purchase price, plus the cost of work, plus 20 per cent.

Money matters

Do your sums! When doing calculations it’s important to factor in the costs of your own home as well as covering any mortgage repayments for your buy-to-let investments, not to mention unexpected maintenance costs and covering the mortgage payments between tenants when your property might be empty. There are always risks when making such a large investment, it is important to prepare for as many eventualities as possible.

When it comes to mortgages, resist walking into your bank and taking on the first deal offered – shop around. Read up-to-date articles online and check out mortgage lenders websites to compare rates. It often pays to enlist an independent mortgage broker to help decipher the best deal out there for you, just make sure you’re armed with some knowledge before any meetings too. Lenders typically ask for a deposit of at least 25% and insist that the rental income is 125% of the monthly mortgage payment.

If you would like to know more on your financing options, we recommend you speak to Stephen Stoops. With 28 years experience in the mortgage market, Stephen Stoops is the expert you need to speak to, with access to the major lenders he can guarantee some of the best mortgage deals around.

As one of the West of Scotland’s longest-standing estate agents, we have had lots of experience managing the ups and downs of the housing market in recent times, so you can be confident you’ll be in safe hands when working with us. With an expert team by your side and a variety of properties on offer, including both property to let and homes for sale, Caledonia Bureau are confident that we can match you with the right home. Give our friendly team a call today, choosing from our offices in Clydebank, Helensburgh, Dumbarton and Paisley.