Property Downsizing: Opportunities for Investors

Property downsizing over 65s moving to smaller home

The housing market, over the last decade has been through a huge number of changes. From the financial crisis that put property prices at rock bottom to prices clawing their way back up to where they are now. Along with this, there is a shortage of properties and the demand cannot be met and that has caused investors to shift their focus onto buy-to-let properties.

In amongst all of this, there are those who are looking to downsize. Gone are the days when homeowners would own the same property for their whole life because the over 65s are now taking a financially-driven approach to housing and where they choose to spend the latter stages of their life. Simply put, the over 65s are now actively planning for the future and their finances and so, more and more are looking to downsize.

Why are the over 65s downsizing?

As people get older, they become less mobile and less able to maintain a large property while there could be access problems in the future and so, downsizing means that they look to sell their current property and move into a smaller property. The whole idea makes perfect sense. Homeowners over the age of 65, sell their property, they move into a smaller property that is suitable for them as they grow old while releasing equity at the same time.

However, it is not as simple as this because there are now more over-65s looking to downsize than ever before. At one end of the market, you have first-time buyers who cannot get onto the property ladder because of prices and a lack of supply while at the other end of the market you have those looking to downsize yet facing a similar problem – a lack of options.

Property Downsizing: Opportunities for Investors Aspen Woolf

What does this mean for those who are downsizing?

A lack of options and sought after accommodation has meant that the market is saturated, effectively meaning that the supply does not meet the demand of those who want to purchase a property that they can call their home throughout the latter years of their life. As the market has adjusted to this increase in demand, it has meant that property that would be considered desirable to those over 65 has increased in value. Therefore, for those who are releasing equity from their current property, they are reluctant to invest it back into property that has been priced in a way that takes advantage of the demand and lack of supply. So, for those who are looking to downsize, it has meant that they need to consider looking at alternative options which includes rental property and this is where buy to let investment opportunities become a possibility for investors.

When people over the age of 65 make the decision to downsize, they perhaps might feel as though time is not on their side when it comes to waiting for the right property to come along. As time passes by, it could result in them becoming unable to move home with them effectively missing their chance and so, ideally they want to move as soon as possible. In this case, they then find that they have no other option other than to consider rental properties as a serious option.

Opportunities for Investors

There are many properties out there that are suitable for those who are downsizing but make great opportunities for investors who are looking to take advantage of the lack of supply in property on the open market. These buy to let investment opportunities come in the form of purpose-built or converted residential properties, that make it possible for investors to offer rental properties to those looking to downsize. As a result, investors offer a feasible solution while also being able to take advantage of excellent returns at the same time.

Due to the high occupancy rates, it has meant that rental yields of as much as 10% can be achieved in some areas. Investors should focus on those specific areas where there are increased numbers of people who are aged 65 and over. There should also be a focus on areas such as the South as well as many of the popular areas in the North such as Liverpool, Bradford, Leeds and Manchester.

Property Downsizing: Opportunities for Investors Aspen Woolf

Investors have to consider that many of those who are looking to downsize still want to remain close to those areas that they are familiar with, while family will also play a role in the decision that they make. Despite this, this is a growing rental market that is enabling investors to capitalise on an area of the market that specifically appeals to those who are over 65.

Properties that are specifically designed with special features such as lifts, parking, wider doorways and are also located near to main roads and public transport should be a serious consideration for investors. Along with this, the over 65s are even considering facilities such as an on-site chef, spa facilities and social events held on-site because this is something that can provide them with all that they require as they grow older.

When investors find the correct buy-to-let investment that appeals to those who are downsizing, it means that they can expect to see returns that are significantly higher than other areas of the buy-to-let market. These buy to let investment opportunities offer excellent rental yields but also the chance of an increase in equity as the property increases in value. With rental yields of anything between 6-10% as well as yields that are assured for anything up to 3-5 years, it seems as though investors have a clear opportunity to invest in a thriving and growing market that is almost guaranteed to offer them a return, regardless of whether that is in the form of rental yields or equity.

As the number of people choosing to downsize increases, it means that more opportunities will present themselves to investors. This will enable them to take advantage of the residential properties that are currently available that not only cater to the needs of the over 65s but also offer an exceptional return on investment.


Is Manchester Buy To Let Property A Good Investment?

Manchester city buildings skyline

Manchester is a key economic area and one of the most high-profile cities in Europe. The city is home to the UK’s second-largest city and regional economy and is also a key area of the Northern Powerhouse. The city has benefitted from the devolution of power and is able to choose some of its own budgets and spending. This has made it free to develop policies designed to attract investment from overseas.

Constant large-scale investment

The city is also known for its thriving media scene, musical history and footballing heritage. Investment continues to transform the city for the better, with new facilities springing up all the time and its skyline constantly evolving. The European Structural Funds programme delivered approximately £366 million to the city, enabling it to create jobs, invest in businesses and fund education. The city is also regarded as one of Europe’s most impressive tech hubs and is noted for its exceptional transport links, leisure facilities and affordable properties, with growing numbers of people relocating from south-east England and overseas to take advantage of its many benefits.

Key growth generators

One of the main generators of recent growth is the Greater Manchester City Deal. This fund is largely centred upon what’s known as an ‘earn back’ scheme. This has enabled the region to recoup extra tax revenue from gross value added (GVA) increases from infrastructure development. The deal has created an apprenticeship and skills hub, raised the number of opportunities offered by the Business Growth Hub and enabled the city to attract further inward investment. It has also established a housing fund enabling further property developments and made billions available for investment. The impact of the scheme is predicted to deliver £1 billion each year to the city by 2025. Money from the Regional Growth Fund (RGF) has helped create almost 6,000 jobs, despite the original target being just 3,700. The Manchester Enterprise Zone, The Corridor, One St. Peter’s Square and Manchester Central also provide further clear evidence of the region’s continued extraordinary growth.

Is Manchester Buy To Let Property A Good Investment? Aspen Woolf

Career and leisure opportunities

The City of Manchester is generally regarded as the heart of the North West. It offers outstanding career opportunities in areas like law and finance, public service and the media. It is also home to 100,000 students and frequently plays host to some of the biggest and most prestigious names in entertainment. Amazon is currently setting up a base in the city, whilst a new GCHQ office is also set to open soon.

Other key attractions

The city’s colleges and universities have produced 25 Nobel Prize winners, with the Manchester Arena being the largest indoor concert venue in Europe. The city is also home to a huge range of cinemas, art galleries, boutiques and independent shops and is within a short drive of some of the UK’s most picturesque scenery, including the Peak District, Lake District and Yorkshire Dales. Manchester Airport was named the UK’s best at the 2015 Globe Travel Awards, with the city producing 3.5% of the nation’s GVA. Its ever-evolving economy has enabled the city to weather the storm even during some of the most troubled economic times.

Greater rental yields

Rents are also on the rise due to the growing demand for accommodation across the city. In fact, rental costs had soared by 30% over a four-year period, according to research carried out by the Manchester Evening News. The Manchester City Council area was the joint-most expensive area to rent a Greater Manchester home in between Oct 2017-Sept 2018, with figures standing at £775 per month on average, with Trafford sharing first place.

Residential and commercial property expansion

More and more property investors priced out of areas like London are now looking to Manchester to help them achieve their targets. New facilities including bars, restaurants, shops and leisure venues are constantly appearing on the streets of Manchester, which is also eclipsing many of its big-name rivals when it comes to house price growth. Research undertaken by Hometrack found that prices had grown by 6.6% on average year-on-year. The average price for a Manchester property stood at £168,900.

Is Manchester Buy To Let Property A Good Investment? Aspen Woolf

Growth outside the city

Growth is also being seen in other areas of Greater Manchester miles away from the city. Bury was showing the second quickest level of growth at 20%, with Salford rents increasing by 18%. Bolton has a rise of 17%, whilst Stockport experienced a 13% rise. Investors drawn to the area don’t have to miss out if they are unable to take advantage of opportunities in the Manchester City Council area. Greater Manchester is home to some 2.5 million residents, with a large number of these seeing substantial house price growth. Many of these areas offer quick and easy access to the city centre, making them ideal for commuters in rented properties. Each of the ten Greater Manchester boroughs have their own decision-making powers and is part of the Greater Manchester Combined Authority led by mayor Andy Burnham.

More buy-to-let options

Investors seeking buy-to-let property opportunities in the M1 postal area can expect to enjoy yields of around 5%. Suburbs just a few miles outside of the city centre like Levenshulme are home to a large number of affordable buy-to-let properties offering yields of around 5-6%. Yields of approximately 4% are on offer when you buy in the more sought-after, leafy locations of Chorlton and Didsbury. Castlefield and New Islington are a short walk away from the city centre and play host to state-of-the-art luxury accommodation. Student-friendly areas including Fallowfield and Rusholme offer quick links to the big Oxford Road universities. Conventional M14 homes can deliver yields of more than 7%, but you could see a return of at least 12% by investing in a house of multiple occupancy (HMO). Ensure you do your research, and your buy-to-let portfolio could bring you fantastic rewards; check out our tips for investing in the buy to let market whether you’re an old hand or just starting out.

If you are looking for new areas to invest in property and are seeking exciting locations that are well and truly on the rise, Manchester and its surrounding towns and cities may well deliver the generous yields that you desire. For our top picks for investment in Manchester, visit this page.

Property Investment Strategies

buy to let buy to sell property investment strategies

Effectively, there are two simple forms of property investment strategy and these are to purchase a property with the sole aim of selling it on to make a profit, or to purchase a property to rent it out and make an income that way.

However, as simple as that sounds, there is more to it because there are a number of sub-strategies that can be used depending on the investor and their goals. So, what strategies are available?


When purchasing a property to rent, there are two ways to make money and they are to charge rent that covers more than the cost of expenses, or to allow the property to increase in value over time, covering costs and expenses.

Single Lets

This is what many would consider to be your standard buy-to-let as it involves renting out a property to an individual or a family. It is an easy option, and one that requires you to calculate the costs in relation to the rent, ensuring that the rent is in excess of the costs.

House in Multiple Occupation (HMO)

This involves the rooms within a property being rented out individually. This can often generate a large income than if the property was rented out as a single property. It is worth remembering that there are higher costs associated with an HMO such as wear and tear as well as the management aspect, which is also more labour intensive with HMOs.

Student Lets

Student lets are a form of HMO although the student market is very different from that of other markets. It is a more predictable market as students are only there for a certain time of year and the contract will be taken out jointly. If a student leaves, the costs get spread out among the rest of the residents in the home. Knight Frank also predict that 2019 will be a big year for the Purpose Built Student Accommodation sector.

Housing Benefit Tenants

This involves renting a property out to those who have their rent paid for by a local authority. What this means for investors is that they know what to charge and it can sometimes be more than the private rental market. There is the potential for difficult tenants and as the rent is passed to the tenant, it can often not be paid to the landlord.

Property Investment Strategies Aspen Woolf

Holiday Property Lets

This involves renting out a property on a short term basis to people on holiday.  This is a strategy that can return significant yields and profits, especially if you have a property in a sought after, prime location such as a cottage by the sea. This takes an active management approach and there are things such as cleaning the property and maintenance that have to be taken care of.

To learn more, why not have a look at our Buy-To-Let Tips? Or, get in touch with our property investment specialists at Aspen Woolf to discuss adding to or creating your portfolio!


Also known as flipping, this is the purchase of a property where there is no income but instead the property is sold on at a higher price than it was purchased for. This can be a strategy that can yield good returns in a short space of time and they can often be higher than the returns seen with a buy-to-let property. However, one thing to consider is that the property will not generate an income while you own it. Therefore, you are only making money once you sell the property on. The key here is to purchase the property at the right price, and try to ensure that all work remains in budget and doesn’t eat into your margins.

Commercial Property

This is a lot different to residential property as it is a market that behaves independently and is very much reliant on the economy and the success of tenants. While residential property relies on and thrives on demand from people needing somewhere to live, commercial property is different.

A commercial property will only be suitable for certain businesses and that means that once a property becomes vacant, it can remain vacant for some time. Despite this, once you have a tenant, the leases can be put in place for years and they will also be liable for repairing and insuring the property. So, if you have a reliable tenant, then it can mean that you can take a hands-off approach for some time.

Property Investment Strategies Aspen Woolf


This essentially involves renting a property from a landlord before renting it out to a tenant. It is a form of sub-letting but the aim is to charge a higher rent to the sub-tenant than you are paying your landlord. This is often something that is seen with an HMO strategy. So, you could rent an entire property from a landlord and then rent out each room in the same way as you would in an HMO. This will enable you to generate rent per room which will more than likely bring you in more income than what you are paying to rent the entire property.

You can find landlords who are open to renting properties at a discount, particularly if you can offer some form of guarantee that they will receive an income and no hassle. So, you could then choose to pay the landlord a lower rent as agreed. It is then possible to re-rent the property at the going rate of the market.

Lease Options

In a similar way to rent-to-rent, lease option provides the investor with the chance to purchase the property at a price for a fixed amount of time.

So, an investor would agree to take an option where they can buy the property at a fixed price at any time during the next three years. However, they can then take over the owner’s commitments as well as expenses and rent the property out. So, investors can then earn a rental income on the property while having the option to purchase it at some point in the future for a slightly higher price.

This is one strategy that has been seen in the past where properties were in negative equity and the owners could not sell their property at a value that would cover the remaining mortgage. So, by agreeing a future price, it enables them to forget about the property in the short term. However, this is an option that is very much market dependent.

Rental Properties Still In High Demand

piggy bank houses

The housing and property market has changed dramatically over the last couple of decades, as any investor will tell you. First-time buyers in many areas of the country are finding it increasingly difficult to get on the housing ladder.

For those with money to invest, the buy to let market is still doing well. This is in spite of tax increases, the removal of tax benefits, and changes to what landlords and letting agents can charge. Not only does buy to let provide a stable, long-term investment with a strong return when you come to sell the property but you also benefit from increased revenue from regular rent payments.

Why It’s So Difficult to Buy

Chronic underinvestment in the housing market over decades has led to a supply shortage, there’s no doubt about that. On 13th March, Chancellor Philip Hammond outlined a revamp of the Affordable Homes Guarantee Scheme, putting aside £3 billion to support buying 30,000 properties for housing associations across England.

While some in the housing sector welcomed the initiative, many have pointed out that it still falls woefully short of what is required. According to the latest government figures, affordable housing to buy or rent may be growing but it still forms a small part of the actual market and is doing little to relieve the pressure.

The high cost of mortgages and getting together the initial deposit for a home is putting off a lot of potential first-time buyers who now see renting as a better or the only option on the table. Of course, there is the option for shared ownership, something that has been increasing in popularity over the last few years. But, in many parts of the country, that still leaves purchasers trying to find enormous deposits and having to manage untenable mortgages.

According to The Guardian recently:

“Currently a shared ownership two-bed flat in London is on sale for £985,000 at full market value, with the buyer taking a 25% share and expected to find £2,469 a month in mortgage and rent repayments.”

Rental Properties Still In High Demand Aspen Woolf

It’s no wonder, therefore, that so many people have given up the ghost and decided to rent. In the UK, we tend to take the notion of owning our home a lot more seriously than in Europe where renting is seen as a good option and where many people treat it as the norm. The problem is that the availability of affordable rental accommodation is also a huge issue.

The Price to Earnings Ratio is Widening

One of the main indicators of affordability is the price to earnings ratio. A recent review by Lloyd’s Bank found that this is increasing relentlessly and now presents a significant barrier in being able to afford a first home in many parts of the UK. The average home in a city now costs seven times more than the average yearly earnings.

Lloyd’s produced a list of the least and most affordable cities in which to buy a home. Oxford, for example, is the least affordable with the average home costing 11.5 times your annual salary. That compares to 10.5 times the annual wage for London and Cambridge. Even if you move further out to the South, in places like Southampton you are looking at 8.9 times the average earnings.

There is a significant north-south divide. Stirling, Londonderry and Bradford are the most affordable buys with prices between 4 and 4.5 times the average annual salary.

Wage Inflation Isn’t Keeping Up

It’s simplistic to say that stagnating wage inflation is playing a significant role in the number of people able to buy their own home. The truth is that house prices have been outgrowing salaries for at least the last couple of decades. After the 2007 financial crash, property prices recovered better than our annual salaries.

How Brexit is going to affect all this, of course, is anyone’s guess, particularly in light of recent events and the political turmoil it has caused. The truth is that, while wages fail to keep up, the issue of affordability is going to become an increasingly important factor in getting new blood onto the housing market.

The Rise and Rise of the Rental Market?

For those who find that affordability is out of their range, the only other option is to rent. According to a recent report by the Resolution Foundation, a third of millennials could well spend their entire lives renting rather than owning their home.

Rental Properties Still In High Demand Aspen Woolf

The creation of ‘generation rent’ may mean that we need to change our approach to owning that home. The report noted that there are some 1.8 million families with children who now rent rather than have a mortgage. Rents are on the increase which may make the housing crisis even worse in the future and many tenants have nothing left at the end of the month and are unable to even save for a deposit.

A shortage of rental properties coming onto the market are also having an impact and that could raise affordability because of supply and demand issues. Indeed, this is already happening in many parts of the UK, particularly in city regions.

The Need for More Buy to Let Investments

When the Government decided to bring in higher taxes for second homes and change the rules on what tenants could be charged for, many buy to let landlords complained that it was going to damage the rental industry. The truth has turned out to be a little different.

The rental market is widening and demand is increasing. Those investors who want to consider buy to let options are still likely to be in a pretty good place if they purchase a rental property. Several factors are contributing to this.

  • Enough affordable housing is not being built – certainly not the 300,000 new homes that were promised by the Government each year.
  • First-time buyers are finding it difficult to get a foothold on the housing market in many parts of the country, despite incentives such as Help to Buy.
  • Those who own their home already are increasingly reluctant to move up and create space in the market because of the high costs involved.

More and more people are seeing the possibilities of residential property as a long-term, profitable investment. There is a shortage of rental properties at the moment that could see an increase of around 15% in rent levels over the next five years if demand continues to outstrip supply. There’s no doubt that buy to let landlords still have a pivotal role to play in the affordable housing market for some time to come.

If you’re considering adding buy-to-let properties to your portfolio, or as a first time investment, brush up on your knowledge by reading our Ultimate Guide To Buy To Let. For expert advice and first-class investment opportunities, get in touch with the team at Aspen Woolf today, our property investment specialists are always pleased to help.

Best Property Types to Invest In

confused person looking at property types

Finding the best property to invest in is tricky. Of course, you could simply pick something based on the yearly returns you’ll see… But that’s not the be-all-and-end-all of investing in property. That’s what this post is all about: not just what kind of returns you can expect, but what makes a property truly worth investing in.

Let’s start by looking at the best types of property to invest in, and what sets them apart.

HMOs/Houses in Multiple Occupation

According to official UK government guidance an HMO, or a house in multiple occupation, is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. These properties are common around cities like London and Manchester, where there are students and young professionals that need relatively cheap housing near centres of employment/education.

HMOs offer the best yield of any property type. According to research conducted by Platinum Property Partners, HMOs offered a 12.4% gross yield on average between 2010 and 2014. That was far more than the 5% average yield from regular buy-to-lets during the same period.

However, there are two problems you’ll encounter if you invest in an HMO. First, you’ll have to get an HMO licence. Not every HMO needs one, and requirements differ between local councils. HMO licence cost varies too, from between £500 to £1000 or more, and licences can be valid for just one year, or up to five.

Besides that, there’s simply more work involved. With more people in the same living space, there’s more of a chance that your property will be damaged and require expensive repairs. This can significantly cut into your return. And since HMOs are often student accommodation, this adds more problems into the mix: late payments are more likely, and students are less reliable tenants, often moving on with little notice. So while a well-managed HMO offers excellent returns, they require more detailed management.

Best Property Types to Invest In Aspen Woolf


Apartments are a good ‘halfway house’ between HMOs and buy to let houses. While your yield isn’t quite as high, apartments typically attract more stable and securely employed tenants. This is great news for a number of reasons:

  • There will be less of a difference between your gross and net yield, since you don’t need a licence, and there’s less chance of missed rent payments
  • Your property is less likely to become damaged, since your tenants are more likely to be young professionals and families who want to keep the property in good condition
  • There are new build apartments hitting the market up and down the country, many of which offer buy to let investors first access
  • Since apartments typically cost less than houses, you won’t be hit with as much capital gains tax if you should choose to cash in on your investment

All that being said, investing in any kind of British land or property has its benefits. The U.K. has a growing population, and the current shortage of new build properties keeps prices inflated. As such, house and land prices will only continue to grow. We offer a mix of apartments, HMOs and houses—we’ve no shortage of buy to let properties for sale.

Where to Invest in Property

Just as important is where you actually choose to invest. The UK housing market as a whole has offered excellent returns for several decades, a trend which is likely to continue into the near and medium term. However, even if the market does dip in certain parts of the country, it’s likely to continue growing at a healthy pace elsewhere. Let’s take a look at the best places in the UK to invest in property!

Buy to Let Investment Manchester

Manchester is England’s second city, and is rapidly growing. Near the city centre and the Media City hub, dozens of new blocks of flats are being built. The majority of these are being marketed for buy to let investors. Why? Because Manchester is seeing upper-single-digit growth figures in property prices. While London and the southeast generally have stagnated somewhat, this has been offset by growth in the north and in Manchester in particular. Not only that, but an influx of people trying to escape London house prices has pushed up prices here significantly.

Best Property Types to Invest In Aspen Woolf
No.1 Trafford Wharf, an investment opportunity in Manchester from Aspen Woolf

Not only that, but the satellite towns around the city—which form Greater Manchester—have seen similar levels of growth. Here, the price of terraced and semi-detached houses has grown far faster than in the southeast. Other northern towns like Leeds and Sheffield have seen similar revivals.

View property investment opportunities in Manchester from Aspen Woolf.

Buy to Let Properties Birmingham

Don’t let anybody from Birmingham hear you call Manchester the U.K.’s second city! Birmingham definitely has a claim to the ‘crown’. For starters, it’s the second most populous city in the U.K., with well over a million people, and about 3 million in the surrounding urban area. This kind of demand for property means that prices grow steadily here.

Not only that, but Birmingham’s population is growing steadily. The city is one of the areas of the U.K. that new immigrants feel most comfortable, which is rocket fuel for local house prices! Investing now, as the population continues to grow, is a smart move.

Buy to Let Properties London

The London property market grew at practically exponential rates over the last few decades. While that growth has slowed down, London remains a fantastic place to invest. As easily the largest financial hub in Europe, and a population centre, it’s highly unlikely that the market will fall from the heights it’s attained.

View available property investment opportunities from Aspen Woolf in London.

But no matter where you choose, the U.K. property market is an excellent choice for investment, with an eye to building wealth. At Aspen Woolf, our award-winning independent advice has been trusted for over a decade—much to our clients’ satisfaction. So contact us online, or talk to one of our experts at +44(0) 203 176 0060 today!

Buy To Let Tips For Successful Property Investment

Property Investment Pros and Cons Aspen Woolf

Property investment has become much more challenging over recent years, yet big rewards await those with the nous, knowledge and determination to navigate the market successfully. Legislative changes including the amendments to stamp duty tax and new rental taxes have caused big headaches for landlords, as have house price drops. Nonetheless, there are still big gains to be made.

Is the time right for you?

The buy-to-let market is synonymous with opportunities for investors such as cheap mortgages and low interest rates. However, landlords are now being taxed on their revenue rather than profit, with the 3% stamp duty surcharge also making many would-be investors think twice about making the leap. In this guide, we will supply you with a range of tips on making the property investment market work for you, even during these more challenging times.

Thinking about the pitfalls as well as the positives

Before you make your big jump into the buy-to-let market, it’s essential to do your homework and spend time reading up on the risks attached to investing as well as the positives. There’s always a chance that other opportunities may deliver bigger rewards. Remember, your investment could see a fall in value, which is why a considerable number of people have been looking at fixed rate savings accounts and income-based investment funds as alternatives. Nonetheless, there are ample opportunities for breathing new life into seemingly humdrum properties, renovating them, adding new features and seeing their value soar. Your profits can be sizeable when house prices are on the up, yet your mortgage payments won’t decrease when fees start to drop. Talk to as many property investment specialists as you can and gain as much knowledge as possible until you’re confident about making an investment.

Research upcoming changes

Keep on top of legislative changes. From the 2020-21 tax year, you won’t be able to deduct mortgage costs from your rental income. Instead, you will receive a 20% tax credit against your mortgage interest. You will need to add income from rent to your general income, pay tax at the appropriate level before claiming back the tax credit. Your lender will typically require your rent to cover 125% of your mortgage repayments, though this could be as high as 150%. It’s very likely that you will need to pay a 25% deposit – again, this could be larger if the rate is much higher than that of a residential mortgage deal. You can expect to pay considerable arrangement fees for the most preferable buy-to-let mortgages.

Select the right location

Area is a vital factor when looking for an investment. No matter how appealing the home is on the outside, there is likely to be less demand for it if it’s not located close to good schools, great transport links and high-quality amenities. Seek out the most in-demand properties that you can afford and think about where other people would like to live. Although thorough research of the geographic location is important to ensure a successful investment venture, try not to be overly biased towards your own area no matter how familiar you are with it. Even if you are emotionally attached to your own environment, it may not have a sufficient level of demand amongst others.

Buy To Let Tips For Successful Property Investment Aspen Woolf

Mortgage and maintenance advice

There are many things you need to think about before you do go ahead and purchase a buy-to-let property. You will almost certainly need to cover maintenance costs and will need to cover yourself during tenant-free periods. The most affordable mortgage rates tend to be on two-year fixes – if you have a sizeable deposit you could source a rate of as low as 1.40%. Many landlords opt for five-year fixes for extra security and peace of mind. Tracker mortgages are determined by base rates plus an extra figure added by the lender. If the base rate is 2% and the lender adds 1% to this, the tracker rate will be 3%. Tracker mortgages can be risky, as your mortgage payments can go up as well as down.

How to impress the lenders

In order to secure the kind of buy-to-let mortgage that you desire, you will need to show strong earnings away from property, excellent rent to cover mortgage payments and offer a sizeable deposit. Rather than simply heading straight to a bank and asking them what they have to offer, consult an impartial independent broker who can introduce you to a range of products and identify the most suitable options for your specific needs. They can also take a close look at your current financial situation and help you decide whether to aim for a fixed or tracker mortgage.

Consider tenant expectations

Avoid thinking about what you would personally look for in a property and focus on what your target tenant is looking for. Your target tenant may live a very different lifestyle to yours, especially if you are renting out property to much younger people. Although many landlords shy away from this, allowing your tenants to decorate and personalise a home can make it more appealing and therefore enable you to charge more. Don’t forget to take out rent guarantee insurance to cover you if your tenants do fail to make the payments.

Be realistic on income

It’s also important to be realistic about income. Media stories about buy-to-let millionaires and their property empires have led to overly-high expectations amongst many would-be entrepreneurs. You are more likely to achieve the wealth that you desire if you focus on the long-term rather than aiming for vast short-term growth. Many landlords use the rent that they receive to fund a deposit for a future investment and grow their portfolios over time. Only a select few are able to purchase a property investment outright.

Calculate your yield

Chances are you’ve come across the term ‘yield’ on countless occasions when reading up on the buy-to-let market. The yield is worked out by dividing the cost of the property by the annual rent that it generates. This means a £150,000 home that delivers £15,000 of rent would have a yield of 10%. However, you will only see the full yield when buying without a mortgage. You can work out the yield for a home purchased with a mortgage by subtracting your annual mortgage expenses from your yearly rental income. Work out the yield as a percentage of your deposit, maintenance expenses and other costs will reduce your return.

Be the best landlord you can

Remember to be kind to your tenants and decide how hands-on you wish to be. You can save money by dealing with your tenants directly but you can also expect to be met with a much bigger workload if you head down this route. By making your home as appealing as possible and providing a quality service to your tenants, you can boost your reputation, grow your portfolio and enjoy greater yields.