When considering the best properties for buy-to-let investments, there are a few golden rules that every portfolio investor needs to consider before signing on the dotted line, to ensure that they are making the RIGHT decision for them.
A letting agent is the best source of information because ultimately they will have to rent it out for you. If they advise you wrong, they also suffer as they will NOT get the instruction or the fee for letting it, as opposed to an estate agent who has no vested interest in the property post-sale.
If you to work with a consultant such as one of our investment advisors, they should be talking to you about these key points before suggesting ANY properties to buy.
The first thing to consider when making a buy-to-let investment is what YOU want to achieve from it. Are you looking for a regular income (cash flow) or a nest egg they gains value over time (capital appreciation)?
This is really important and any experienced advisor should work through this with you to ensure both you and they understand what your objectives are, as this will dictate a very different purchasing strategy.
At one end of the spectrum, you will get great capital appreciation but low cash flow. At the other end, you will get high cash flow but low appreciation, and then there is everything in between. Understanding where you want to sit on this spectrum will set you off in the right direction.
The level of funding you have available and your attitude to risk will help to ascertain what sort of property purchases are available to you.
If you have more funding available, you may choose to go for larger investments like HMO properties. If funds are limited, a smaller unit such as a 1 bed house or flat may be a better starting point, granting you the ability to work your way up the property ladder over time.
Very few people buy cash, as the return for leveraged purchases are usually much higher. See the ARLA buy to let index review, which is issued quarterly to see the difference demonstrated.
At Concentric, we have dealt with many cases from landlords who went on property courses geared towards massive cash flow, only to end up with a load of run-down, cheap properties full of undesirable tenants, spending most of their time chasing DSS claims and trashed units, all whilst trying to keep the day job.
It's important to know what type of landlord you want to be, so you can make sensible, well-researched choices on the highest quality buy-to-let properties that fit your schedule and budget.
Do you see yourself as a full-time investor landlord with a tool box in the boot and giving up the day job? Or, do you see yourself keeping the day job and just building up an asset base to live off in retirement? Answer these questions with us.
So many portfolio investors make this mistake: they fall upon a type of property that works great as a first time investment, and decide they are only going to buy “that” type of unit or in that "type" of area over and over again.
Putting all their eggs in one basket leaves them exposed. If the market changes - for example, their property type gets oversupplied, or their area becomes the route for the relief road - all of their investments are at risk.
With Concentric, you are expertly advised to selectfully spread your risk across the profile section that you are identified as being within, keeping you safe.
If you have the skills, time and contacts to lend to refrubishment projects, they can prove to be very lurcrative buy-to-let investments, but it can be a very painful and hard experience if you do not.
Landlords who work in a trade such as building, carpentry or plumbing have assets that they would be wise to capitalise on. Landlords who work outside these trades, and lack valuable contacts or any experience with refurbishing, can end up trapped in these projects, often becoming a money drain that eats up their budget. What suits one can be a disaster for another.
We cover refurbishment projects and more in our buy-to-let advisory workshops, taking attendees through the different avenues of property investment and exploring factors they would need to consider. We consult each attendee to assess their skills, desires and personal situations, to help them figure out the best property investment plan for their individual needs.
To find out more about our buy-to-let property investment workshops or how we can help you by working with you as a consultant to help you identify the right property to buy- contact your local branch Coventry, Liverpool, and Wolverhampton of Concentric Sales & Lettings.
Our Wolverhampton Expert Advisor in Property
Ali has been working in property all of his working life, in various parts of the coutry, and is phenomenal at what he does...
Heading up the Branch and intricately involved in all the property movement in the area, plus being a recognised professional member of the Guild and the branch being ARLA licensed, and on the back of 30 years of TRADE... Ali is in the ideal position to source deals for investors, as well as being able to identify a cracking deal when it appears.
Many of the deals sourced by Ali are “off market” properties too, some with tenants already in situ and therefore receiving rent from day one of purchase, which is a great position to be in as an investor.
If you are looking for advice on what to buy where to buy and to know what will give you the BEST return on the market right now, Ali can walk you through the process step by step…
Phone: 01902 421 405