How to choose a rental property03-10-2022 | Other
Your finances are in order? Check. You’ve researched how to choose a rental property? Pending.
If you’re about to dip your toe into the buy-to-let market, you’ll want to identify some key economic indicators which will assure your new asset.
Multiple property owners and first-timers alike want to be made aware of untapped locations that could offer top-yield potential.
Is now a good time to buy a buy-to-let property?
Landlords are jumping on investment properties more aggressively than ever. With the cost of living crisis looming and living, property once again proves itself to be a solid investment.
In a clear response to the cost of living crisis, landlords are scrambling to ensure their landlord insurance is up to date to protect themselves from the increase in rental arrears caused by hard-hit tenants.
A considered approach which avoids putting landlords at risk of financial arrears is by investing in different locations with a variety of properties catering to different types of tenants.
Where is the best place to purchase a buy-to-let in the UK?
With London dropping down the ranking to 6th place due to the rising property prices and levelling out of yield per occupancy, you might want to consider these other hotspots when choosing your buy-to-let.
And London has dropped to 6th place.
Bristol has shot to the top of the ranking due to its steady long-term property growth which averages at 5.1%.
Cambridge and Oxford are obviously notable university cities. With HMOs (houses of multiple occupancy) being a popular purchase for first-time landlords, you should consider the university cities as prime locations. HMOs in the student market reap benefits such as constant demand and higher yield per property.
Rental demand is up 6% compared with last year and available properties are down 26%
Taken from a report by rightmove
Where are new landlords investing?
There are some trending spots catching the attention of the new landlord sector in the UK.
- Hartley Pool – Average monthly rental income of £474. Average yield of 7.9%
- Middlesbrough – Average monthly rental income of £507. Average yield of 7.8%
- Plymouth – Average monthly rental income of £763. Average yield of 5.7%
- Portsmouth – Average monthly rental income £1028. Average yield of 5.7%
Taken from a report by The Telegraph
What is a good rental yield on a property?
You’re going to want to aim to get a 5-8% yield on your property. You’ll be on track to make a good return on your investment if you hit this percentage.
What is the best type of property to invest in?
- Residential rental property with single occupancy.
Investors are finding one-bedroom apartments a safe bet when choosing a city rental property. In comparison to HMOs, the hassle-free single or couple-tenant market is attractive to many landlords. One-bed apartments are also highly likely to sell quickly.
Single properties with multiple tenants equal a better yield. It’s no wonder landlords favour university city buy-to-lets with high demand from the student tenant market.
- Commercial/ business property such as an office building, retail store, industrial or even parking.
- Holiday rental property.
Coastal hotspots such as Bournemouth are increasingly popular to investors due to the high average night rates of £205 as Rightmove reports.
All of these prospective purchasers require landlord insurance. Make sure you know your landlord building insurance from your landlord contents insurance and get both in order before proceeding with a tenant.
Do I need landlord building insurance?
A weighty concern for most landlords is malicious damage or unforeseen water, fire or smoke damage. To safeguard yourself as a landlord you’ll want to invest in a specialist insurance policy with CIA as soon as possible. Request a call back today or get in touch to speak to our highly experienced team.
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