By Sali Brown
Managing Director
Chelton Brown
COMMUNICATION with an estate agent before buying a property is always key, and this is particularly important for buy-to-let investors. There are key questions that should be asked, and they can differ from the standard question that a house hunter would think of. Here, we share our top tips to ensure that investors have all the information they need before making an offer.
Is the property freehold or leasehold?
Buy-to-let investors should check whether the property is freehold or leasehold initially to factor in any service charges and ground rents which could impact yield. Find out if you are buying a leasehold apartment what the annual service charge is, because you the landlord are liable for this annual cost. Also, what is the size of the managing agent’s Sinking Fund in the building regarding cover for future works planned?
Has the property been rented before? What is the demand like?
Get a copy of the current tenancy and deposit protection, together with a schedule of rent history. An agent can advise you on the quantities of people looking to rent this style of property.
Is the area safe and desirable?
Look at local amenities such as train stations, schools, and sports centres. The shops can suggest something about the local area as well. Lots of boutique coffee houses and trendy bars suggests professionals with a higher disposable income – these are often the dearer properties though which could impact yield.
What is most important for you?
Ask yourself what is most important to you – is it yield, potential void periods, hassle factor, capital growth or ease to let now and in the future?
If maximising yield is not the main driving force, the ease of letting the unit and minimising maintenance may appeal. For a long-term investment, natural growth is often underrated. For some people, if costs are covered, the yield the property can generate is not as important. If you are looking to cover costs in the long term, there can be no greater asset than having the right tenant in your investment for as long as possible. Most new investors, however, turn to short term investments.
What is the energy efficiency like?
The Law is changing from April 2018 and properties which have a poor energy efficiency rating will be required to upgrade. Tenants’ expectations rise year after year and a low cost energy-efficient property is more important than ever, and will ensure you don’t have any surprises next year.
For more information, contact Chelton Brown on 01604 603433 or 01327 879431 or visit the website www.cheltonbrown.co.uk