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How to Succeed in the UK Buy-to-Let Market
Do you remember Worzel Gummage? The loveable scarecrow who switches his old turnip head for a happy head or sad head to suit his mood? Well, sometimes people don’t put on their ‘thinking heads’ and venture into the buy-to-let market only to purchase a property that nobody wants to rent. Here we give you a 5-point plan to avoid some of the common pitfalls.
1. Keep a Cool Head. Buy-to-Let is a mid to long-term investment option. Don’t count on quick short-term gains and countless riches from rental. Keep your eyes on capital gains underpinned by regular rental yields set at a rate which cover costs and allows for ‘void’ periods (times when the property is una’void’ably empty). The greatest returns will accrue over the long term. Remember that in the UK, property values have doubled every 7.2 years so be prepared for short term flat spots and roll-backs but look to the future for the real advancement. 2. P.L.Us Avoid this at all costs. P.L.U stands for ‘People Like Us’ and you must not, repeat not, purchase a property only because you like it. Take a leaf out of Worzel’s book, think about your likely tenant, get inside their heads. Buy a place that they would want to stay in for long periods, delivering you regular rent which they can afford, to service your investment. 3. Interior Designer Drama – I don’t think so. Leave this to Carol Smilie. A neutral white or magnolia with pleasant non-offending curtains and hard wearing berber carpet will fit the bill for most tenants. The aim is to offer tenants a place where they can add little touches to make it ‘home’ for them – not to live in someone else’s TV programme. The happier they are, the longer the rental term. 4. North, South, East, West, where to buy? - which is best? Location, location yes, yes ,you know the last word. It’s true – but it may not be quite the location you are expecting. Many investors decide to buy ‘close to home’. They know the area, can easily jump in the car to check on their investment and feel content. However, an up and coming area, miles outside their comfort zone may be the best place for their money. There are property ‘Hot Spots’ all over the UK that are primed for capital growth and are in the process of regeneration. These may be the best places for your money to work the hardest. 5. Help! – You may need somebody. Speak to someone who can help you plan your portfolio, nurture your investment and build your buy-to-let holding over time, strengthening your position as gains are made. You could contact ARLA – the Association of Residential Letting Agents. Based in Uxbridge, NiceHouseUK are specialists in the Buy-to-Let property market. Visit their website at www.nicehouseuk.com or call 0845-200-2918 for more information. www.businessinberkshire.co.uk/property
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