Useful Tips for purchasing a

Buy to Rent Property

 

If you need help and advise with regard to structural surveys, building surveys, engineers reports, home buyers reports, commercial building surveys, schedules of conditions, specific defects reports, including things such as cracks, dampness, condensation, foundation problems, etc. please free to phone 0800 298 5424 for a friendly chat.

Our Surveyors also rent out properties so this is written by people who know about the business rather than those who just talk about it!

 

Rental properties are a Business

You need to think of a buy to rent property completely differently to your own property. Things that you do to your house to make it into a home are quite different to things you would do to a rental property. This does not mean that the standards are less it just means that standards are different.

 

First things first

We would of course recommend that you have a Building Survey carried out on the investment/buy to rent property by a Building Surveyor who is experienced in renting out property, as we are! We know this is a self-advertisement but there are so many Building Surveyors who do not actually get involved with the property industry.

We both rent out properties and also manage properties and carry out projects. You need to make sure that the Building Surveyor that you are dealing with does know and understand the property industry. There is a different criteria when you are buying a property to rent rather than as your home.

Rental properties Make sure the numbers work!

If you are buying a property to rent then you need to understand the market that you are buying into and what rental returns it will get for you. You can do this by researching either in local papers or online at websites such as rightmove.co.uk or other property websites such as

findaproperty.com

zoopla.co.uk

primelocation.com

nestoria.co.uk

to see what rentals are achievable in an area and for which type of property. For example you may be going into the specialist holiday let housing market which again is a different variation of the typical long term buy to rent market.

 

Take note of the research you do

 

We say this because we come across investors that get so carried away by the investment that even when they carry out research that shows them that they can only get X amount for market rental in the area, they ignore it. You need to understand that the market is the market and you will very rarely get rents consistently above what the market pays unless you have a very large cash injection in a refurbishment that is a unique selling point.

We have in the past actually gone round to look at properties to rent ourselves so we can get a better gauge of the type of refurbishment that we will need to do to meet the standard of the competition in the area.

 

Type of rental is important

Also by doing research and visiting rented properties you will start to understand how properties are rented out in the area. By this we mean is it normal to rent out to families or to students in the area or is it normally a multi-let property meaning that it is let room by room. This in turn means you have to comply with various other regulations. Once you understand the property market you are looking to invest in you then you can start to look for an ideal property for you to buy to rent.

 

Make sure your finance is in place

 

Very often it is the finance that collapses when y ou are looking to buy the property.

 

Make sure you have a way of finding properties

This can range from having your own website, to having newspaper adverts, carrying out a leaflet drop or to getting on well with Estate Agents. You do need to look at a lot of properties before you make an offer. Then offer on several properties before you find the property.

Famous property guru, Dolf De Roos, recommends looking at hundreds of properties to make offers on ten. It is well worth getting some of his CD's or MP3's and listening to what he has to say as he is an experienced property developer albeit is not in the United Kingdom . He is originally from New Zealand and now invests and lives in the United States of America.

Whilst we are talking about good listening material we would also recommend anything by Earl Nightingale and also the classic Rich Dad Poor Dad by Robert T. Kiyosaki.

It's also worth having a look at some of the books, Cd's and MP3's that Donald Trump, the New York property investor, has produced. Particularly interesting is Donald Trump's life story, which is not an autobiography.

 

What repairs should I carry out to the rental property?

We are not sure this is the question yo u should be asking, you should in fact be asking if you can rent the property out without doing anything to it? This is assuming of course that you have bought a property with no structural problems (have a Structural Survey /Building Survey carried out by a Surveyor!) as a property with structural problems can be very expensive as with underpinning. Please see the article below and others that may be of interest and help to you.

Foundations Underpinning

Homebuyers Report Structural Survey

Adding Value

Property Management Cash Flow

Buying Auction Info

 

 

It all comes back to making the numbers work

The numbers in this case are about buying a p roperty where you can get a maximum rental with minimum costs on repair, maintenance and upgrading. Regarding upgrading we find that people that are not professional property people tend to want to upgrade everything just as they would their home. There are however some upgrades we would recommend.

You are in the Buy to Rent Industry and it should be remembered however much you like the property programmes on television (and there are some good ones) they are for entertainment and not education primarily. Some are more educational than others but you would be surprised at how much is missed out to make these programmes work in the half an hour or three quarter of an hour slot they have. You need to remind yourself you are not in the upgrading or refurbishment business, you are in the rental business and as such the property is being altered for the rentals business.

 

Upgrades we would recommend for rental pro perties

Our priority list starts with health and safety. This is the list we would use.

 

Health and safety

1.  Electrics- are they safe and up to date?

2.  Gas and heating- is it safe, up to date and working?

3. Consider whether gas and electric should be put on card meters or not?

4.  Water and wind tight- is the roof watertight particularly looking at flat roofs and older pitched roofs.

5.  Add fire alarms and other related products such as fire extinguishers to the property

6.  Install carbon monoxide detectors.

 

Cleanliness and Comfort factors

1.  Is the property comfortable enough to rent out? i.e. are the windows drafty or do you need to upgrade to double glazing?

2  Is the decoration an acceptable standard for people to move in?

 

3.  Do the carpets nee d replacing (do they smell of smoke for example).

4.  Some areas such as Wi-Fi have become an essential part of the package that you need to rent out the property.

5.  What are the conditions of the bathrooms and the kitchens? Be very wary of bathrooms and kitchens as they are a great way to spend a lot of money. Remember it takes a long while to get your money back.

 

Curb-side appeal

No matter how comfortable you have made it inside if your property doesn't have any curb-side appeal in the photographs then you aren't going to get people to view the property.

 

How much decoration is required in a rental property?

We would say you have to do the minimum painting necessary. We have looked at properties which have terribly old wallpaper or coloured paint which are not popular today. Often this is where they have used fashionable or popular colours originally. You need to learn from this and stick to neutral colours such as magnolia and white (we were once called the magnolia men because every project we carried out had magnolia walls). Sometimes we may add feature walls, you need to gauge if this is necessary to rent the property. Of course you do need to check that is as simple as just being able to decorate the walls. We dealt with a property recently where the flat roofs were leaking and causing dampness to get into the walls and as such it was impossible to decorate.

The other thing to be aware of in older properties is asbestos which was used everywhere. One thing that it was used for, and is not commonly known, is textured paint, more commonly known as Artex. Certainly do not sand this down you need to give it a skim coat of plaster. There are plasters specifically made for this purpose. Then you can redecorate!

 

Treat your tenants as clients and customers

So many people that we know on the rental side do not treat their tenants as customers. Good tenants will not only give your property back in the same condition as when you first rented it to them but they will recommend you and help you to market your properties with word of mouth recommendations.

 

Best of luck with your rental

The only way to learn is to actually do in our opinion. So you need to now go ahead with your first rental. You may well make mistakes but as long as you learn from them (and they don't bankrupt you) enjoy the learning experience.

Why Use Us?

 

Independent Surveyor's Advice

If you truly do want an independent expert opinion from a surveyor with regard to structural surveys, building surveys, structural reports, engineers reports, defects report, including things such as cracks, dampness, condensation, foundation problems, etc, dilapidations, homebuyers reports or any other property matters please free phone 0800 298 5424 for a Surveyor to give you a call back.

 

Independent Commercial Property Surveyors

If you have a commercial property, be it leasehold or freehold, then you may wish to look at our Dilapidations Website at www.DilapsHelp.com and for Disputes go to our Disputes Help site www.DisputesHelp.com .

 

We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).

The contents of the web site are for general information only and is not intended to be relied upon for specific or general decisions. Appropriate independent professional advice should be paid for before making such a decision.

All rights are reserved the contents of the web site is not to be reproduced or transmitted in any form in whole or part without the express written permission of www.1stAssociated.co.uk

 

 

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