Thinking of Becoming a Landlord
Do you have:
Landlord Starter Service
The Complete Service For any one wanting to become a property investor all under one roof:
Property For Sale - Our Estate Agency division offers a variety of properties suitable for the investor, some currently rented out and under the management of our Property Management Division.
Advice - Advice regarding rental levels, type of tenant the property will attract and the anticipated costs of managing and maintaining the property.
Search and Acquisition - Finding and viewing suitable properties, and negotiating the purchase.
Finance - Access to the ARLA Buy to let scheme lenders and advice on release of equity for deposit. Drewery property services can provide competitive quotes for buy to let mortgages from all leading lenders by speaking to one of our associated independent buy to let mortgage advisors.
What is Buy to Let
Buy to Let is the initiative devised by the Association of Residential Lettings Agents (ARLA) and supported by leading letting mortgage lenders. It is designed to stimulate the growth of the Private Rented Sector by encouraging the private investors to take opportunities given by competitive interest rates and the reasonable certainty of sustained capital growth over a number of years.
Why Buy to Let
Many Landlords invest in property because of personal savings in banks and building societies, equity investments and pension schemes produce such low levels of interest. The investment in property also allows an investor to look at and improve his ownership unlike investment in shares or savings and in a market which most investors know and understand.
Demand for rented accommodation has increased by 50% throughout the UK in the last 15 years, with further particularly large increases seen in Greater London. Today, the private rented sector makes up about 15% of all housing stock and with the introduction and increased use of shorter employment contracts and the need for job mobility, the forecast is that it will continue to grow.
The growth in the private rented sector has also been assisted by the introduction of the Housing Act 1988. This deregulated the rental market as well as providing a legal framework which was fair to both the Tenant and the Landlord. Other factors which have assisted included the overall growth in the number of qualified specialist letting agents which with the introduction of the housing act have made mortgage lenders accept the risk of assisting private landlords with competitive interest rates.
Large increases in property values over recent years have also encouraged investors to invest in rented accommodation. Most of the UK has seen an average property price increase of 8.4% per annum over 30 years and even when property prices have fallen slightly it is predicted that they will always rise due the shortfall of new homes required to replace old stock and to accommodate the ever increasing UK population.
The supply of good quality 1 & 2 bedroomed properties in particular is unable to meet the current demand in many local areas and as a result rent achieved levels are increasing. In general demand for property to rent is providing a healthy rate of return on carefully and well prepared investment properties
Where and what to Buy to Let
Location is just as important as the property and price paid for it. Many Landlords forget that they are making a purchase for investment and not a home to live in. It is a good idea to look at each property before buying as if you were a tenant considering the property to rent. Our Lettings team will advise you who are the main type of people looking to rent in a particular area and the type of property in demand.
A large proportion of tenants looking to rent are young professional couples choosing to rent first before purchasing, either because they have not got the large deposit required to buy, have just relocated or just started professional working careers. Larger properties tend to rent to families who have relocated due to a job relocation and want to rent and get to know the local areas before committing to a purchase.
Our head office, being located in the commuter town of Sidcup, Kent (in the London Borough of Bexley,) is only 12 miles from central London and enables us to offer a comprehensive range of property throughout the boroughs of Bexley, Dartford, Greenwich, Bromley and surrounding areas, all with regular fast rail links to Central London and easy access to motorways (M25, M20, M2), and the Channel Tunnel.
Major towns in the vicinity include Sidcup, Bexleyheath, Dartford, Bromley and Eltham SE9. Local schools include co-educational & selective Grammar schools and a variety of independent schools for all ages. Our location attracts a large numbers of tenants looking to benefit from the above mentioned local services and facilities and we would strongly recommend property purchase for investment in these areas.
Many tenants now also consider safety aspects of property when choosing a property to rent. A Landlord should avoid purchasing property in run down areas, places situated next to loud facilities such as pubs, nightclubs etc just because the purchase price is less. Other key benefits which a tenant will consider include parking, type of heating and how modern both bathroom and kitchen facilities are.
What type of property
The type and age of a property tends to be unimportant as long as the property is in good condition and the layout is not unusual or too small. A tenant will normally consider the same factors when choosing a property to rent as would a person looking for a property to buy, including factors as décor, how modern bathroom and kitchen facilities are and type of heating. In some cases it is advisable for a Landlord who is thinking of purchasing an older style property to have a survey carried out so to identify any future problems.
Most tenants will be looking for good quality one or two bedroomed flats in well maintained blocks. Larger flats will often produce a lower rate of return and are often more difficult to let. When purchasing a flat consideration should be given to the exterior appearance of the block and quality and upkeep of communal areas. Research should also be made into the cost of maintenance charged by the freeholder or managing agent and details of any soon large maintenance projects to the block.
Small modern properties on modern development are also an ideal investment but sometimes might have to mature before greater returns are achieved. Other properties such as larger homes will let but often do provide the level, of return most investors are looking for.