Things to ask before buying a rental property
What is the rental potential?
You need to be realistic about the likely return on your investment. See what other similar properties in the neighbourhood are renting for, but be realistic about your own property – is it really at the top end of the market, or is it more likely to attract a more budget market?
In addition, check out government advice for landlords https://www.gov.uk/browse/housing-local-services/landlords to make sure you follow the law in your region.
What is happening in the neighbourhood?
This includes both positive and negative things. A new station being added, for example, can make a huge difference to the desirability of a neighbourhood and push property and rental prices right up. Likewise, a new leisure development can be a big plus for an area.
Negatives might include plans to close down a large store or the relocation of a business that employs a lot of people locally, for example. Look for signs of regeneration in the neighbourhood and surrounding areas to get a feel for what’s going on locally. Reputable agents such as Property Management Cheltenham can help you assess areas.
You might want to use an agent to manage your property https://www.completepropertygroup.co.uk/property-block-and-estate-management/, especially if it’s not near to where you live yourself.
What’s the competition like?
It might seem like a no-brainer to purchase a property in a popular and busy rental area – and in many cases this is a good idea. Beware, however, the pitfalls of having too much competition. Unless you have one of the cheapest properties on the market, or you are offering something particularly special or different, it can be difficult to stand out from the competition. Some areas of the UK are saturated with rental properties, and there simply aren’t enough willing tenants to fill them.
Who is your target market?
There is no point targeting your apartment at young professionals if it’s located in a suburban area favoured by families and retirees. Don’t just look at the property when you’re making your decision – look at the area and the infrastructure. For example, if you’re planning on buying a home suited to a family with young children, they will want good schools nearby and possibly outdoor space such as a garden or nearby park.