There’s no doubt that buy-to-let properties can offer excellent investment opportunities. But that doesn’t mean they are without risk. You still need to manage your investment very carefully to ensure that you maximise your income. Here, Dakota Murphey in a project with property professionals, South East Leasehold gives you 6 ways to get the most out of your buy-to-let property.
1. Choose the right location for the property
Location is everything when it comes to any sort of property investment. The most important thing you will do to maximise your buy-to-let income will be choosing the right property to make the most money. Little details like whether the property is on a bus route or whether there is ample parking in the area can play a huge role in determining the value. It’s absolutely essential to do your research thoroughly before making the purchase.
You also need to take into account things like seasonal variation. Is your property in an area that’s popular with students? If so you need to be aware that student tenants will probably only be with you over the university calendar which may not be ideal, especially if you can’t achieve any short-term lets to fill the gaps.
2. Find gaps in the market
On the same note, what you are really looking for is a gap in the property market that will always need filling. In every area it will be different and that’s why it’s so important that you should have a good idea of the market that you are going into.
You might find that there is a scarcity of city centre properties available for rent close to you. If this is the case it’s then up to you to balance whether this is likely to be a long-term issue or whether there are already measures in place to deal with it – never buy to let on the basis of a quick win.
3. Improve first impressions
Making a great first impression is vital in life, and it’s no different when you are letting a property. It’s definitely worth it to make changes like giving the whole property a new coat of paint and having a thorough clean to ensure everything looks great. Prospective tenants will make a decision very quickly about whether the property is right for them and you will put a lot of people off if it doesn’t look in top condition.
4. Make sure everything works properly
In the same vein as creating a great first impression, you should do everything you can to ensure everything works properly in the property. We’re not talking about things like electronics, lights or taps, because these should be a given.
It’s the little things that go unnoticed – the sticking door, the drawer that doesn’t close properly – they might seem insignificant to you but to potential tenants they are a signifier of a property that isn’t looked after very well. If your property appears to be free from any problems you are more likely to attract the right people.
5. Value your tenants
If you’ve ever had to be the tenant in a property you will know the value of finding a landlord that you can trust. When the shoe is on the other foot, you’ll understand just how valuable it is to find tenants that you can trust. That means if you find a tenant that pays their rent on time, doesn’t cause problems and generally acts well in your property, you should do everything you can to hang on to them.
Many landlords think that the key to maximising income is to regularly increase rates, but if this makes your property unaffordable to good tenants this can leave you with two problems. Firstly, you’ll lose a trusted tenant and secondly, you’ll have to take a risk that your next tenant won’t cause any problems. Generally, good tenants will understand the need to raise rates occasionally, but if it starts being a yearly thing you will put people off.
6. Minimise voids
The scourge of the landlord are the voids in the calendar. If you lose a tenant you need to replace them as fast as possible – even just a few weeks without someone occupying your property can make a massive dent in your profit margin. Do everything you can to keep your property occupied; remember that reducing your rates is better than having no-one in the property at all.