Is now the right time to invest?

Nov. 30, 2015 - PRLog -- √ Supply and demand

One of the first things a prospective landlord must consider before investing in a buy to let property is the buoyancy of the current rental market and industry predictions for its future.

“It’s vitally important that you understand what demand there is for rental properties and what your competition will be before you commit to becoming a landlord,” says co-owner of Belvoir Liverpool West Derby and Belvoir Liverpool Central Adam Rastall. “Carefully research the local market to find out what’s on offer (the internet is a great place to start), how long units are taking to let and what kind of figures they are achieving.

“With a notable shift towards renting in recent years, the market is currently strong in most areas but your local letting agent will be able to advise you further on this.”

√ Sales market movement

In addition to understanding the local rental market it’s also essential to research the status of the sales market too.

“Savvy landlords know that they need to invest with minimum outlay to maximise their profit potential,” says owner of Belvoir Portsmouth Samantha Bateman. “What is your local sales market currently doing? How much is it going to cost you to make the investment? And how much more or less is it predicted that it will cost you if you waited another year?”

Adam agrees and says, “In recent months we’ve seen house prices steadily increasing and many prospective buyers are hurrying to snap up what’s on offer before asking prices climb even further. Ask a local sales agent whether this rise is likely to continue in the coming months and how steep it is likely to be.”

√ Housing stock availability

“How many suitable properties are currently available for you to choose from?” asks Adam. “It’s important to know the housing stock availability and its suitability before you can make the decision that now is the time to invest.

“A sales market saturated with properties will often allow for negotiation as competition between vendors will be fierce. It will also give you choices and enable you to pick the right property for your needs.

“As a general rule the sales market usually slackens in the run up to Christmas and then picks up again in the New Year. Ask an agent’s advice on whether this has historically been the case in your area.

Also ensure you de-personalise your search, he adds. “Don’t take your business cap off and get drawn into purchasing a property because you’d love to live there yourself. Always make sure it’s right for the rental market and your target tenants.”

√ Mortgage matters

If you are going to require a mortgage in order to secure an investment it’s important to carefully research what’s on offer. Do you know what products are currently available and if you will be eligible to successfully apply for one?

“It’s surprising how many prospective landlords decide to start searching for an investment property without knowing exactly how they are going to finance it,” says Adam. “If the perfect property is found before finance solutions are finalised this can inevitably lead to disappointment.

“Know what you can afford, which lender has agreed ‘in principle’ to provide the mortgage and how you intend to repay it before you start your search. Plus, prepare for every eventuality, remembering that interest rates can go up as well as down. An independent mortgage adviser will be able to explore all the options for you.”

√ Life stage and age

Your personal circumstances will also dictate whether the time is right for you to become a landlord.

“At different times of our lives some investment opportunities become more attractive than others,” says Samantha. “Before investing in a rental property think about your current life stage and age and what the benefits will be of becoming a landlord at this particular time in your life.

“For example, are you looking for an alternative pension pot solution? Or do you have teenage children who would benefit from living in a rental property owned by you? Perhaps you’re just starting a family and want a long-term investment that you can pass on to your children in years to come?

“Also, consider how owning a rental property will fit into your day-to-day life alongside your current family and career responsibilities. Will you have enough time to source, secure and manage a property? If not, will you have the budget available to ask an agent to manage it for you?

“Becoming a landlord is a large financial commitment but, if executed correctly at the right time for you, it can be one that really pays off.”

• Belvoir now has over 160 offices nationwide. To find your nearest Belvoir office, visit their website at www.belvoir.co.uk

[-ENDS-]


For further information, or to request an interview with a Belvoir expert, please contact Sanchia Gorner, tel: 01780 749049/07912 558308 or email: sgorner@bylinesuk.com