buy to let - how do you choose?

nat38

hi all, I'm very new to all this, so please be patient!
what would be the major points to consider when buying a property to let?
- location, I assume
- size? is it always 'bigger is better' even for a 1 or 2 bed?
- DG and/or GCH? Am I right in thinking that electric heating is not very good?
- council tax bracket?

what else?
many thanks!

GDB2222

Rental yield.
Expenses, eg a lift is generally bad.
Did I mention rental yield?
And then, ofc, there's rental yield.
Near the station, so it's easy to let out.
Not to forget rental yield.
Easy to maintain.
And remember the rental yield.
Two beds are good, so you can get get sharers, which improves the rental yield

Got the picture?

G_M

Depends on your target market?
Students? Choose close to a uni! And smaller rooms.
High Flyer execs? Buy near the City/Docklands. Big rooms, fancy furnishings.

Point is your market dictates the location, size type of property/furnishings an/or the location dictates the market.....

All electric saves the hasstle/cost of annual gas checks, but is less popular so might put off tenants. Again - who is your target tenant?

Get a good book to help you think this through. This post recommends one.

Annisele

Have a look at G_M's post for new landlords.

Have you thought about your target market? Students? Families?
Is the potential rent enough to make it worth the risk?

And no, bigger isn't always better. If you find yourself a 20,000 square foot 1 bed in the middle of Wales and try to rent it out at a zillion pounds a month, you'll struggle.

Edit: beaten to it! What the others said.

nat38

GDB2222 wrote: »

Rental yield.
Expenses, eg a lift is generally bad.
Did I mention rental yield?
And then, ofc, there's rental yield.
Near the station, so it's easy to let out.
Not to forget rental yield.
Easy to maintain.
And remember the rental yield.
Two beds are good, so you can get get sharers, which improves the rental yield

Got the picture?

:rotfl:
got it - thanks!

nat38

many thanks!

to be honest, we haven't thought any of this through....

this is the situation: we're thinking of buying a 2nd property which my husband will use 3 days a week for 1-2 years, and then rent it out, so we were mainly looking at flats we (or should I say he?) liked, but now I am starting to consider all these other factors as well.....

GDB2222

nat38 wrote: »

many thanks!

to be honest, we haven't thought any of this through....

this is the situation: we're thinking of buying a 2nd property which my husband will use 3 days a week for 1-2 years, and then rent it out, so we were mainly looking at flats we (or should I say he?) liked, but now I am starting to consider all these other factors as well.....

As a generality, a place you would buy to live in yourself is not likely to be a good BTL proposition.

Werdnal

nat38 wrote: »

many thanks!

to be honest, we haven't thought any of this through....

this is the situation: we're thinking of buying a 2nd property which my husband will use 3 days a week for 1-2 years, and then rent it out, so we were mainly looking at flats we (or should I say he?) liked, but now I am starting to consider all these other factors as well.....

Flats are often leasehold, and the lease could prevent you letting. If you are buying with a mortgage, you would need to get consent to let, or change to a BTL agreement later on.

getmore4less

Gross yield 10% is good starting point.

Low interest rates have people accepting less but long term you need to be thinking 10%.

ticket2ride

buy the cheapest slum that you can rent out for the most money to tenants in receipt of housing benefit.

Annisele

nat38 wrote: »

this is the situation: we're thinking of buying a 2nd property which my husband will use 3 days a week for 1-2 years, and then rent it out, so we were mainly looking at flats we (or should I say he?) liked, but now I am starting to consider all these other factors as well.....

You also need to think about what you think the housing market is going to do in the next couple of years. My own personal view (and I'm not an economist) is that prices are either going to stay where they are or fall - so I think that, once all costs are taken into account, you'd be looking at a capital loss over the next couple of years.

Presumably the reason for the second property is that it's some distance from your home - which could be a pain if you later want to let it out.

Could your husband rent a flat for the next couple of years? Could he get a room in a shared house (possibly on a Monday to Friday basis)? Could he stay in a hotel three nights a week? (Personally I'd hate that, but overall - depending on area - it might work out the cheapest option if you can get a hotel to quote you a good rate).