When you decide to buy a rental property, there are numerous things you need to consider to ensure a return on your investment. At Homes4Harrogate, our most recent event gave comprehensive advice and guidance on making property work for you. Following on from the event’s success, here are our top tips to help you get the most from your rental property.
HAVE A PLAN
Before you look for a property, set a goal and stick to it. Decide what you want to achieve and then build your strategy for getting the most from your rental property.
If you’re looking for capital growth, you’ll need to find a property that has a solid chance of selling for more than you paid. There’s no crystal ball to tell you whether property prices will rise or fall, and you’ll need to look into the local property prices – both past and present. In terms of the future, make sure you’ve done your research into market trends and predictions.
On the other hand, you might be looking to focus your energies on rental yield. In which case, you’ll need to do a full appraisal of the local rental market. Is it saturated? Or is demand still high? Ideally, you’re aiming for a yield of at least 4.5%. In recent years, Harrogate has seen rental yields as high as 6%, making it an extremely attractive place for landlords looking to invest.
Where is the money for your investment going to come from? Do you have savings? Or are you taking out a mortgage? You MUST know the answers to these questions. If you’ve got options when it comes to finance, take a look at the current mortgage rates. If they’re low, you might be wiser to leave your savings where they are and take advantage of what the bank can offer.
Getting the most from your rental property will, from time to time, involve investment. There’ll be times when you don’t have tenants, or when repairs are required. Make sure that you’ve got enough in the bank to cover your mortgage and all other possible unforeseen circumstances. New central heating systems don’t come cheap…..
MANAGE THE PROPERTY WELL
Make sure you fully understand what’s involved. You must keep up to date with rules, regulations and changes to the law to ensure that you’re not prosecuted or fined, and that your tenants are safe and secure. Check in with your tenants, charge fair rent and ensure that repairs are carried out swiftly and properly. Of course, we would say that having a fully managed service from a reputable agent is the way to go – we’re letting agents after all. But it’s true. Managing a property is hard work, and problems arise at all times of the day and night. We don’t mind that; it’s what we do. But if you have a full-time job, and find that you’re missing out on time with friends and family, chances are you’re not getting the most from your rental property.
There are so many stories about the demise of the buy-to-let market. But as property expert Rob Bence comments; “Investing in property may have become a little more complex, with changes to tax relief rules and increases in Stamp Duty Land Tax now in play. But property remains the safest form of investment and it is absolutely still possible to prosper from it”.
If you’d like to talk to us about the services we offer please call 01423 637637, we’d love to help you get the most from your rental property.