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It’s an exciting time when you first venture into property investment, but beware there are a number of things to consider so you avoid the dreaded rookie mistakes.

Research, Research and a little more Research!

I would always recommend you purchase your first buy to let in a location you know well, subject to suitability. Don’t be afraid to talk to local agents about what types of property they have the best demand for as these are likely to also have the best returns. What type of tenants do you wish to attract and what would their main criteria be? Take the rental value the selling agent gives you with a pinch of salt as it is in their interests to sell you the property. Get at least 2 more valuations. Take the lowest rental value to do your calculations and you will not be disappointed. Try and also pick local independent agents as their local knowledge is normally far superior to the big corporate agents.

Location, Location, Location!

A well-used phrase I know but never truer than when you buy a rental property. Rental properties must be near all facilities such as transport links, shops, gyms, parks etc. etc. People who rent will always make practical decisions and properties must ‘tick their boxes’.

Tips.

1. Do not make emotional decisions! A stunning conversion flat or Victorian cottage may take your breath away, but it may also take your profit away! Older properties will take a lot more looking after and these costs are always going to be yours! If they have been recently refurbished, then great but you must look long term. Do not be put off by ugly or plain properties because tenants aren’t! If they tick their boxes, they will rent it.
2. Think like your prospective tenant. Have your own tick box and stick to it. In my experience the main boxes they want to tick are: Can I walk to the station? Is it close to the local facilities? Is it clean and modern? Does it have central heating? Does it have a good shower? Is the kitchen well equipped? Is the accommodation bright and spacious?
3. Financial Obligations. Remember that as a Landlord you are responsible for all costs associated with your property other than utilities. E.g. Maintenance charges, ground rents etc. If you are buying a leasehold make sure these costs are reasonable and there is a decent sinking fund for any future costs.
4. Negotiate in the extras you will need! As a Landlord you will need to provide your tenant, even in unfurnished properties, with washing machine, cooker, fridge/freezer, flooring and window coverings. (Blinds or Curtains). If these are of a decent quality, then try and negotiate with the seller to leave them and save yourself the cost of providing them.
5. Do some preliminary Safety Checks. As well as needing a survey it may be wise to check the safety of the electrics and gas appliances. As a landlord you must supply a gas safety certificate and as of the 1^st July 2020 an electrical safety certificate as well. If the gas boiler needs replacing it is worth knowing this now and you may be able to negotiate the cost of this from the selling price.
6. Check the EPC (Energy Performance Certificate). As of April 1^st, 2020, any property with an energy efficiency rating of F or G will be deemed as unrentable. I would also strongly advise that you avoid those properties with an E or below rating as it is my belief that these legislations will be extended to include E.

Once you have your Buy to Let.

Presentation

We always recommend that a property is initially presented in good decorative and clean order. Freshen up any paintwork, replace any badly worn flooring, renew any worn or outdated curtains/blinds and always have the property professionally cleaned. We appreciate this is a lot of cost initially but, barring fair wear and tear, the tenant must give you back the property in the same condition and if they don’t then, wear and tear accepted, you can insist they restore the property to that condition.

The better presented your property is, the more rental income you’ll receive. Spending money and time on presentation is a must do investment, that will pay dividends now and well into the future.

Safety first – get your electric, and gas appliances checked and approved. 

You have a ‘duty of care’ to your tenants to ensure everything in the property is safe.  You will need to have all gas appliances serviced and certificated yearly and as of July 1^st, 2020 your electrics must now be checked and certificated every five years. If you also have a current property with an EPC (Energy Performance Certificate) rating of F or G you will need to do any recommended works to bring the EPC to a minimum level E as from 1^st April 2020 these are now deemed as unlettable.

To furnish or not to furnish, that is the question. 

A lot will depend on the what your local market favours, but we recommend leaving your property unfurnished. If you do have any soft furnishings in the property they must comply with The Furniture and Furnishings (Fire & Safety) Regulations 1988. Most furniture now comes with the relevant labelling – which must be left attached.

You may need permission to let your property out.

As a Landlord there are 3 main permissions needed.

1. Your Mortgage Provider must approve any letting.

2. If you are a Leaseholder then you will also need your freeholder’s permission and

3. You will also need to let your insurance provider know so that they can make any necessary amendments to your policy.

It’s always wise to check if you need permissions from lenders or freeholders, but you may also need permission from your local authority if your property is in a protected building or conservation area.

Always better to be safe than sorry.

Get insurance!

Alongside your normal Building and Contents cover you will need 3^rd party liability insurance. At PPM we recommend you get a policy that provides specialist Landlord coverage. Most good Landlord insurance schemes will also protect your rent and provide specialist assistance in relocating your tenant should your property ever become uninhabitable. Well worth the peace of mind!

There’s a lot more to becoming a landlord than people realise. We can help you with every aspect of your letting journey, ensuring you, and your tenants, are protected and safe to enjoy the property.