What makes a good buy-to-let?

What makes a good buy-to-let?

It’s a question we’re approached with all the time, what makes a good buy-to-let? It’s not an easy answer, but certainly we can point towards some fundamental guidelines and rules of thumb when it comes to UK buy-to-let investment.

Whether you’re an experienced investor or a first-timer, we can all use the advice of people who have been in the game for a while, and so we’re going to go through what makes a good buy-to-let, and some of our top tips for your next investment!

If you’re a first timer who’s been considering investing in UK property then fear not, you’re not alone. With the rise in the cost of living, the rise in fuel, inflation, poor stocks and shares markets and the collapse of crypto, there are many that are now making the move towards protecting and growing their wealth via UK property.

Considering that many stocks, shares and crypto currencies have sunk by as much as 50-75% in the past 18 months, compared with the average 10% per year price rise in UK property prices over the same period, should give you some indication of the strength of the market.

As more and more people venture into buy-to-let investment, it’s important to consider the key factors that make for a good buy-to-let property.

What makes a good buy-to-let investment property?

Location, Location, Location

This may feel a bit obvious, however, many do get this wrong. So, what makes a good property location?

What makes for a good buy-to-let location is awareness of your likely tenants and tenant demand in the region. If you’re looking to invest in a city centre apartment, for example, then the likelihood is that you’re going to want great facilities, fast broadband, great transport links and proximity to nightlife.

That’s because you’re likely letting to young professionals who prioritise these features when looking at renting a property. If you’re instead looking towards something larger or in the suburbs, then you’re likely going to be letting to families. If that’s the case then proximity to good schools, low crime rates and good roads towards main city centres could be what you need to consider.

Student investments tend to be slightly different in that you want something with great rental returns within a popular student city or town that offers high student numbers, as student property doesn’t tend to appreciate hugely in value, but will return an excellent income over the long-term.

Apartment, house or HMO?

This then leans in towards which property you decide you want to invest in. A HMO, or House of Multiple Occupation, is an excellent investment that offers very high rental returns, however, tends to be slightly more complicated when getting licenced to do so, and can take longer if you want to sell and move on.

Houses are excellent in that they retain and grow their value probably better over the long term, but they might not offer quite as high a rental income.

Apartments are excellent shorter term investments as they tend to increase in value quite quickly and also offer strong rental returns.

Much of this will also then rely on what your budget looks like, as some tend to cost more to buy than others.

When asking what makes a good buy-to-let, one of the best things you can do is to reach out to experts within the market and ask for their advice. The team here at yieldit have been advising our clients for years, so don’t hesitate to reach out and ask for our expert advice on all matters buy-to-let, from budget to property type to location, we can answer all your questions and find the perfect investment for you!

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