Are you having second thoughts about investing your hard-earned cash in the property market? Is the taxman giving you sleepless nights with spiralling tax duties on your rental income? Are you breaking down with high maintenance costs on your buy to let investment? If the answer to the above is yes, take a minute to check out our guide on how to adjust to the impending changes in the property market in the UK.
Buy to let is the best investment
You may want to reconsider and try other avenues of getting a return on your investments. Head to the stock market and you will have to contend with the headache of dipping stock prices and frequent ups and downs to guard your cash. If on the other hand you decide invest it into a savings account, be prepared to bear with low interest rates and a snail’s pace growth rate. Therefore, we are back to our buy to let investment, which is the best choice, if managed well. If you’re trying to decide where in the world to start investing, take a closer look at some of the United Kingdom’s unlikely cities reaping good buy to let investment profits.
How to get the best buy to let investment
To get into the property market, you need to consider some factors and research on the best buy to let investment opportunities. You can additionally carry out the following:
- Perform thorough research on the buy to let market. The internet provides you with tons of data on the property market and this should be your first start. Talk to a buy to let investment broker or other property owners and get some advice on the pros and cons of this lucrative market.
- Hunt for the best buy to let mortgage deal that is convenient to your available cash and plans
- Get a backup plan if you are a first time buy to let investor to cushion you as you learn the ropes of the business.
- Consult an expert advisor on the best buy to let investment opportunities. This will enable you understand the best locality for your investment, the target market and expected annual rental yields. The team at Aspen Woolf are on standby to receive your call and can assist you in selecting the right investment for your budget. Our sales team are on hand at every step of the way, including resales advice in the future.
How to maximise returns on your buy to let investment
Having gone through the above process and made your buy to let investment, all that is required is to sit back, enjoy your rental proceeds or make profit on your investment. However, with changing economic times, it is imperative to guard your investment against losses and stagnation. To remain afloat if you are considering the property as a long-term investment, you need to implement the following:
- Consider purchasing low investment properties that you can renovate and build up to your specification after buying the property. Research shows that the average rental yield (percentage rental income versus the value of property) is high in Northern England and low in London, south and East of England. This is because the costs of purchasing property in these areas differ. However, the demand for housing near London is quite high hence your property
stays vacant for relatively fewer months before getting a new tenant if the former tenant’s lease
- Never underestimate the student housing market. Purpose built student accommodation is highly sought after in university towns and cities. Sheffield, Leeds and Manchester all provide excellent investment opportunities at far lower costs than London.
- You can consider furnishing your property before renting it out. This enables you to earn above the set rent. The added advantage is that the furniture can be used on long term by different clients.
- To use an agent or solely manage your buy to let investment: weigh the pros and cons of each. You save lots of cash without agents by managing your own property, but you should be ready to dedicate your time soliciting for tenants, solving leaking drainages and other hitches. On the other hand, using an agent ensures that you get tenants quickly and raise your rent income without delays and also get more time and space for your personal pursuits.
- You can consider renting your investment as an HMO (Houses in Multiple Occupation). Renting your property to multiple tenants enables you to raise more rent as opposed to a single tenant. It also minimises the risk of problematic and troublesome tenants. However, you should consider the council laws so that you do not face any fines.
- You can make a bargain when purchasing investment. This is after thorough market research to ascertain the market prices of the property.
- You can review your mortgage and get a suitable rate that saves you some interest.
- Install add-ons like a dishwasher, fridge, freezer and air conditioner. These appeal to the tenants and provide you with a basis to increase the rent. If well maintained, the add-ons can go for many years thus giving you value for money despite them being installed only once.
- Utilize the available space to elevate your property status. You can create a private balcony, garage, lounge or children’s playground out of the unoccupied space and manage to lease out your property at a higher value.
- Increase the rent: Changing financial times demand a change in the rent of your property. It is best to use a gradual approach like leasing out your property for one year. Then you can increase the rent for the subsequent years as opposed to long-term leases.
If your buy to let property is however a short term investment, you can still maximise your returns by adopting the following measures:
- Getting an agent to solicit and manage the property. It is much quicker for an agent to get short-term clients.
- Carrying out maintenance and refurbishing the property to appeal to brokers and other property buyers. In this way, you make a profit by buying at a low price and selling it for a higher price.
- Researching on the best buy to let investment opportunities for different localities and investing accordingly. In this way, you get to quickly buy and sell property suited to different tenants like student hostels for properties near a university, beach houses for a resort area among others.
Whether your buy to let property is meant for long term or short-term investment, you can always make the best of the situation in the changing times. Proactive measures like market research, proper KYC checks of the tenants and proper financial management will make you successful despite the changing buy to let market.
For further information on any of our fantastic buy to let investment opportunities, get in touch with the team at Aspen Woolf today,