15 things to think about before you invest...

The experts at Belvoir Lettings reveal the top 15 things a novice landlord needs to know before investing in a buy-to-let property


1. Do your homework
“Research the market to see what need there is for the type of house you are looking to buy,” advises Lee Shuell, Proprietor of Belvoir Oldham. “Make sure you are given a professional rental appraisal, don't just take the selling estate agent’s word regarding the rental valuation – remember, they want you to buy the house!”

2. Mortgage matters
“Will you need a mortgage?” asks Paul Cartwright, Proprietor of Belvoir South Hants. “If so then the rental return will need to meet the lender’s requirements – usually the rental return has to be in the region of 125% of the amount of the monthly mortgage outgoings.”
Lee Shuell of Belvoir Oldham adds, “Search around for a good buy-to-let mortgage deal - interest only may be better to start with and switch to a repayment at a later stage.”

3. Spare the repairs
Make sure the property you’re investing in is in a good condition. “Having to constantly pay out for repairs is not only a drain on resources but time, money and confidence too,” says Michael Betteridge, Proprietor of Belvoir Poole and Westbourne. “Plus, a property that is in a poor condition will attract poor tenants.”

4. Think tax
“Do you understand the tax implications with respect to Capital Gains and Income Tax?” asks Paul Cartwright of Belvoir South Hants. Make sure you do before you sign on the dotted line.

5. Does it add up?
“As a professional landlord with a portfolio of properties it is very important to get your sums right,” says Craig Walker, Proprietor of Belvoir Camberley. “Do your research in the local area to find out actual rental figures. I would then factor in ground rents, maintenance charges and a realistic figure for any works needed ongoing. If the figure you are left with isn't covered by the rent with a little left over don't do it. Auctions, probate sales and sellers in a rush to sell can be open to offers so low offers are always the way to go to maximise your investment as well.”
Lee Shuell, Proprietor of Belvoir Oldham agrees and says, “Set yourself a limit of how much you want to spend on a house, don't be shy to bid low - always remember that you are looking for a good rental yield.”
Paul Cartwright of Belvoir South Hants adds, “Bear in mind that Capital Appreciation over the short to medium term will probably not materialise so you should be looking for a positive rental income with a yield in the region of 7%.”

6. What’s included?
Always “confirm with the vendor what is included in the sale price,” advises Terry Lucking, Proprietor of Belvoir Peterborough and Corby.

7. Location, location
Ask yourself, “is it a strong rental area?” says Michael Betteridge, Proprietor of Belvoir Poole and Westbourne. “Not all the nicest areas make good rental areas, it needs to appeal to the broad spectrum of tenants from young couples to families. Also think about school catchment areas – an added bonus, which can boost the rent achieved. And, a close proximity to local amenities is always a bonus too.”

8. Choose carefully
Choose the property carefully and don’t fall into the trap of investing in a property that isn’t right for the lettings market or wouldn’t appeal to tenants.
“Before investing choose carefully,” says Paul Cartwright of Belvoir South Hants. “Many new investors over the ‘boom’ years bought ‘off-plan’ flats/apartments that were totally unsuitable from a lettings perspective and made sense only when sold on.”

9. Be realistic
“Be realistic about your expected rental return in the current market,” advises Michael Betteridge of Belvoir Poole and Westbourne. “Prices in the Poole and Westbourne area, for example, have taken a hit - some as much as 30%. A realistically priced property will let a lot quicker.”

10. Hidden hints
Don’t take a property on face-value when viewing it for investment purposes. Make sure you look out for hidden hints that may indicate bigger problems. Terry Lucking, Proprietor of Belvoir Peterborough and Corby, says watch out for “Stains to ceilings below wet areas, stains to ceilings below water tanks and hot water cylinders and rugs on carpets - take a look underneath they sometimes hide a multitude of sins.” Terry continues, “Do the vendors have pets? This can have pest implications and I would recommend you ask for the carpets to be wet cleaned and pest treated.”
And, make sure you bring any issues to light with the vendor early in the sales process. As Terry says, “What can you do? Unfortunately, if the monies have already been exchanged then nothing.”

11. Legal lessons
You’ll need to be aware of “your legal responsibilities with respect to Energy Performance Certificates, Gas Safety Certificates, Electrical Safety and, if the property is to be let furnished - The Fire and Furnishings (Fire Safety) Regulations,” says Paul Cartwright of Belvoir South Hants. “Before you find a tenant you will need to have an understanding of Tenancy Agreements, legal notices, inventories and the new deposit regulations. We have compiled a list of over 100 laws which impact upon lettings of which at least 50% have criminal penalties attached!”

12. Target your tenants
“What might appeal to you might not appeal to anyone else,” warns Michael Betteridge of Belvoir Poole and Westbourne. Think about what kind of space and interior is going to attract the most tenants. “Space in communal living areas is important,” continues Michael. “People like space, in fact open-plan living areas are more favourable, as are neutral colour schemes.”

13. Visiting time
Don’t just rely on a single viewing before agreeing to purchase – visit the property again before completion.
“In our ideal world any maintenance issues arising while the property is under offer will be sorted out. And when you get the keys and move in the property is cleaned and ready for you,” says Terry Lucking, Proprietor of Belvoir Peterborough and Corby.
“Unfortunately, this ideal world bears little resemblance to the real world! You should visit the property at regular intervals before the sale is completed. In my experience good vendors will not be concerned or annoyed by these visits.
“I recommend that either yourself or the letting agent who will be marketing your property request to visit the property the day before exchange or completion,” continues Terry. “If this request is refused then this should sound alarm bells and therefore I would suggest that you ask your solicitors to withhold at least £500 to cover cleaning, clearance and possibly any faults. If there are any other major issues then a solicitor will act to recover costs if the property is faulty.”

14. Kerb appeal
Don’t lose out on potential tenants by investing in a property without adequate parking facilities. “Parking is always a bonus - most families have at least one car,” says Proprietor of Belvoir Poole and Westbourne Michael Betteridge.

15. Ask the experts
“Ask an independent lettings agent, such as Belvoir, what the house might be worth to buy and what sort of rental return you can expect,” advises Rick Flay, Proprietor of Belvoir Sheffield and Chesterfield. “Ask for comparable sales and rentals so you can compare like with like.”
Proprietor of Belvoir South Hants, Paul Cartwright, agrees. “Before doing anything always seek advice from a professional lettings agent,” he says. “Your local agent will direct you to the most popular areas for renting and tell you the most popular types of property in those areas. Bear in mind that their business depends solely upon renting out property, not selling it; therefore it does them no good whatsoever to have properties sitting on their books that they cannot let.”

• To find your nearest Belvoir office, visit their website at http://www.belvoirlettings.com/

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