A 13-year Landlord’s Quick-Start Guide to Valuing Investment Properties, Picking Tenants, Negotiatin

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Combining the two is unlikely to get the best of either. You need to be clear which it is. A lot of flats on the south coast incur paintwork damage and need regular window-cleaning. Keep the property in good nick — otherwise the maintenance jobs become far bigger. If you are buying a leasehold, ensure the building has a property management company with a sinking fund and planned works. Relocating families, perhaps renting with a view to buying, make good tenants. They have money in the bank and look after a place. Voids are the real killer of the financial model behind buy-to-let.

Do anything you can to avoid them. A long one, or even three short ones in successive years, can turn what would have been a profitable investment into a loss-making one.

One-beds, studios, smaller, cheaper, tatty flats tend to entail a higher turnover of tenants. Clearly, the higher your churn of tenants, the more void periods you endure. Flats at the lower end of the ladder also take longer to rent. However, the opposite is also true. Decent-quality family homes within walking distance of highly rated schools should be quick to let and also mean families are more likely to settle for longer.

Once children are happy in school and local friends are made, the decision to uproot and move again becomes far harder. A really successful property investor outperforms the market. That may be through adding value, or it may be because they have invested in something that will benefit from the infrastructure that is predicted to lift an area.

In other words, rather than go for a new-build development — where you are likely to be paying a premium — they will go for an older property in the next street. If an area dramatically changes, people think they have been clever because their property goes up by 20 per cent. But when the market rises, it covers up any mistakes you make. When searching for the right buy-to-let property to buy, yes, read the press and websites, but get out on the streets, too, and talk to people.

Levels of deposit, gearing and rent are all in a state of flux, so sort out exactly what you can afford — and what you will need to recoup in rent — before you start looking at locations and what type of property you can afford to buy. It may be tempting to buy in the area you know. Certain areas may be hyped because they are predicted to see huge price growth due to big new infrastructure projects. But that hype is usually created by the PRs of large developers, so take it at face value.

So sound out rental agents locally. Ask what kind of property they wish they had more of, and then find out what the type of tenant who wants that property looks for when renting. Resist the temptation to over-furnish or overstock the property. Ask yourself how much these additions will add to the rent — and the answer is probably none. If your property offers those, you should already be able to get the going rent for it. Are long-term tenants more demanding than short-term tenants?

Tenants, on the whole, are pretty demanding — and why not? For the landlord, a long-term commitment to rent is good news and it does not mean your tenant pays less rent. You may also get an arrangement, such as a landlord I know with tenants on a year lease.

The house needs work he is reluctant to do, so they are paying to put on the extension and change the windows in return for a lower rent. Once you know a market and have a model that works, it makes sense to carry on with the same formula and build up a portfolio of similar properties.

A balanced property portfolio combines properties with more chance of capital appreciation and others that offer greater yield. Add commercial properties to the mix and you have assets requiring less landlord involvement than residential — until the lease is running out and you need a new tenant. The landlord must be far more strategic then: With residential, if you pick the wrong tenant, you only have to wait a year to sort it out. Buy for the long term and finance carefully. Use the smallest deposit possible.

And remember, too, that interest rates go up as well as down.

Have a clear strategy about why you want to invest and what you are going to be investing in. Research the characteristics of the tenant market you target. What do they want? Where do they want it? How much will they pay to live in it? When investing at an older age, income is more likely to be the main driver than capital appreciation. Where this is the case, something like a student let or an HMO tends to provide higher yields, but bear in mind the hassle factor.

Also weigh up the relative costs of using a property management agent versus the potential hassle of doing it yourself, which you may have time to do in retirement. But they do rent well and offer good annual yields, so could offer retirees a half-way option. I understand the need for income in retirement, but remember you are tying up cash in an asset that is fairly illiquid.

The thing to remember with offers of free this and that is that you are paying for them somewhere. Developers are not charities and are not offering you a gift. By bumping up the price of new-build properties, developers are trying to establish a new market rate for that kind of property in the area. Again, as an investor, that is not necessarily a bad thing as it is increasing the value of your investment. Building a big portfolio today is hard because of the equity needed.

It was easier when there were per cent mortgages and you could say: If you are building a big portfolio — say, more than 15 properties — while also going out to work, you must look at whether the money you are paying to your managing agents starts to exceed what you earn by working. When this situation arises depends on how much you earn and then on management fees. As these are a percentage of the rent collected, it is not about the number of properties you own, but their value and income.

Property tips for landlords - Telegraph

A lot of developers target expats — and they make life very easy for you. But in property, if something is easy, you are not going to get the best value. As long as you realise that, however, buying new-build may still be the best way for you and may be worth it, given the hassle it will save you. If you are an expat landlord and concerned about whether you can leave your property to tick over in your absence or should be returning frequently to check all is OK, I would say you are safe to leave it.

1. Rental Valuation

I was in a flat two weeks ago where the shower door fell out. Blocked gutters can cause expensive damage. Another hazard is leaking drainpipes. Bathroom ventilation is important. Also beware of houses let out to young lads even if they are graduates, which is my target market who have a tendency to keep all windows shut and dry washing indoors.

One of my houses is let entirely to girls and they keep it beautifully. You can even live in it if you want to. Many people got involved in buy-to-let in the days of per cent or even per cent loans, simply because they could.

If you got into the market late, just before it crashed in , and took out a big mortgage, you could be paying for that property for the rest of your life. Now, you need to be able to prove that you can achieve a certain level of rent to cover the mortgage — most lenders ask for per cent, which means that your monthly rental income is per cent of your mortgage payments. Real Lettings wants more landlords to offer properties in return for guaranteed rent.

When my sons were born nine and seven years ago, I bought them each a house so they will have a roof over their head. Steer away from modern flats in city centres, particularly in northern cities. Target your tenant type — young graduates are consistent, reliable and will always exist — and make sure it fits in with what you can afford in your chosen location.

Choosing a Letting Agent

While the bulk of corporate tenants will be in London, there are other areas that will see high numbers of them. Aberdeen is also stuffed full of corporate tenants.

By having a portfolio of properties, you can balance out your risk. If one property out of 10 has a problematic tenant, such as a shop that goes bust, the other nine can cover it. The economy and wider markets will influence the commercial and residential property market. But unlike stocks and shares, the relative illiquidity of property investment means peaks and troughs can last for years. Commercial property is a more complicated proposition than residential property.

But you need to know what and where to buy and the usage class — if it has a licence to sell food, for example. That can make a big difference to your rent. Where serious investors get excited is buying a property they let with a full repairing and insuring FRI lease for years. They get quarterly payments in advance, no repair bills and it runs itself. But it usually means a bigger upfront investment.

You can also create a nice investment by buying a whole building, converting two floors into flats — which you then sell — and letting out a commercial space on the ground floor. But you need money and experience to do it. If you borrow to buy you need to closely weigh up what the future performance of the property might be, bearing in mind you will pay back a lot in interest to the lender. Auctions are transparent but you must be organised on the day. You and your solicitor should have looked at the lease and got your finance ready.

Basically you need to get all your ducks in a nice, neat row. Something new commercial landlords may not be prepared for is understanding the business of the tenant — and being able to read their accounts almost forensically in order to form an opinion about the investment. If a commercial tenant goes bust, you may be looking at a six-month void period.

Landlords with an empty shop need to consider offering rentfree periods to tenants. If your property is a rundown newsagent and a smart stationery shop approaches you for a year lease, they will need to spend thousands fitting out the property. Agreeing to a couple of months rent-free will ultimately benefit you as the owner. The better their track record, the more comfortable you will be. Join the Comfort Standard , enjoy better letting.

A Nottingham Letting Agent with a difference The reputation of a well-regarded agent can be very attractive to tenants and an agent with membership to regulatory bodies can give you peace of mind that your money is in safe hands. When asking a letting agent to value your property, you will have several options and agents to choose from. Agents sometimes differentiate themselves based on fee levels, but there are a number of other important factors.

The quality of service you receive will ultimately influence your experience as a landlord and therefore an agent offering best value for money rather than cheapest fee may be best suited to your needs. A property valuation with Comfort Lettings will take into account many factors which will affect the appropriate rent to charge your tenants.

Property tips for landlords

Our local experts are on hand to guide you through the important questions and property related legislation. We base our valuations on our knowledge of the local market trends and use this information to guide how we market your property.

Before choosing a service level, it is worth thinking about the level of involvement you want to have with your tenant and property. Without a letting agent, finding the right tenant can be expensive, time consuming and hard work. Once we receive instruction from you we will prepare the property details. Your property will also be marketed on our website comfortlettings.

We also use rightmove. The website is fully responsive to mobile phone and tablet formats so prospective tenants can search for properties when they're out and about. As a general rule, we will carry out all of your property viewings with one of our professional Accompanied Viewers. Each property has a viewing pack carefully put together by one of our Valuers to ensure that our Accompanied Viewers are already knowledgeable about the unique selling points.

When preparing your house for viewings, remember to appeal to the masses. Start by ensuring that your house is clean and clutter free. Our trained experts are able to handle the negotiation between you and your prospective tenant. At Comfort Lettings, we strive to get you a favourable rental value, but there are other factors which are worth considering when choosing prospective tenants such as suitable references and reliable income. Any special tenancy clauses need to be agreed at this point in order to avoid any misunderstandings further down the line. It is important to run thorough checks on a prospective tenant to ensure that your investment is secure.

At Comfort Lettings, we use strict referencing procedures which give our landlords a comprehensive understanding of their personal and financial circumstances including a check on their employment history, credit worthiness and previous addresses.

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