According to statistics released by the Council of Mortgage Lenders in December 2014, the number of loans for the purchase of buy to let property continues to grow – the value of mortgages advanced in October 2014, for example, was some 29% more than the same month in the previous year.
This suggests that mortgage lenders at least continue to take a positive and optimistic view on investment in buy to let property.
According to the Telegraph in October 2014, there are currently some 2 million buy to let landlords in the UK – if you intend to join their ranks, how might you go about choosing your investment property? Although no one may be able to guarantee the success of any buy to let business, some of the following considerations may turn out to be critical.
For many landlords, it is likely to be important that any investment property is not too great a distance from their own home. However, this is still likely to present a wide range of choices when it comes to homing in on the more attractive and desirable locations for rental property.
What makes any rental property attractive or desirable is likely to depend on the target market to which tenancies are pitched, but there may nevertheless be a number of more or less common features that appeal to the market as a whole.
Some tenants, for example, may give just as much importance as you to the location of the let property – whether it is close to their place of work, or, in the case of students, close to their college or university campus, or for those with children the proximity and ease of access to schools.
As experts in the provision of landlord insurance, for instance, here at Cover4LetProperty we have published survey results which suggest that although location also continues to be an important consideration for tenants, the cost of rent may be at least equally important.
In our independent survey of tenants in the private rented sector, for example, some 82% of those interviewed gave the cost of rent as a primary factor when choosing where to live.
This may serve as a timely reminder to landlords that, despite the evident increase in demand for private rented accommodation, rents still need to be pitched at a competitive market rate if they wish to attract more discerning, reliable and longer-term tenants.
Travel and transport
Whether work, campuses or schools are physically close, tenants generally place an importance on the rented property being close to good public transport links.
In urban environments in particular, tenants may want to be no further than say 5 to 10 minutes away from the nearest public transport route.
Quality of the accommodation
When choosing your investment property you might also want to bear in mind that the quality of the accommodation offered is also something that has been found to attract discerning tenants.
Each year, the renowned property agents, Savills, conducts a survey of what tenants appear to want and the exercise conducted in the spring of 2014 certainly seemed to bear out tenants’ general search for quality.
That quality may be measured in a number of ways, of course, but might range from facilities for off-street parking to such relative luxuries as en suite bathrooms or private balconies. Once again, it is important to keep in mind your likely target market when choosing your investment property – it may also hold the clue to determining just how much work it might be worth doing to increase the quality of the accommodation once you have bought it.
You may be surprised by some of the measures by which your potential tenants may determine the desirability of a rental property.
The survey commissioned by Cover4LetProperty, for instance discovered that a very significant proportion of respondents gave whether the letting had a garden as the third most important feature.
The tenant landlord relationship
Independent surveys have also revealed that tenants place value in simply getting on with their landlord. The landlord, in turn, is also likely to have a good relationship with his tenants to be in his interests – tenants are the source of his business income after all.
From the landlord’s perspective this may be more a question of mind and an approach to the business, rather than the choice of a physical investment property. But it is an important consideration and one likely to be based on a mutual trust and respect between the landlord and his tenants.
Ultimately, of course, the choice is yours to make. The investment in buy to let property is likely to be significant and the return on that investment depends not only on the level of rent you demand but also the reliability and continuity of that rental income, which is most likely to be secured by delivering to the tenant as much as possible of what he or she wants.