So you’re new to the world of Property Investment? However new you might be, you’ll be aware of the overused phrased – ‘location, location, location’. Overused it may be –but for a very good reason. If you’re thinking of investing in property, then getting the location right, along with getting the price right, is the most important decision you’ll ever make. In this blog, we’ll look particularly at the importance of location in the Buy To Let market.
How to choose the best location in the Buy To Let market
Size doesn’t always matter. It’s difficult to overestimate the importance of location in the Buy To Let market. It’s certainly more important than the size of the property you invest in. You’ll often find that a small Buy To Let property in a good area will be a better bet than a large property in a poor location. Popular areas almost always generate enhanced rental levels, and tenant demand is often much stronger. This means you’ll enjoy much shorter ‘void periods’.
Who already lives in the location?
As a buy to let property investor, it’s vital that you begin by understanding your target market. What kind of tenants do you want to attract? Students? Young single professionals? Families with children? People usually want to live in an area inhabited by people like themselves.
What about local crime statistics?
Does the environment in the area where you’re thinking about buying look run-down. Are the local shops fitted with heavy steel shutters? This can indicate a high crime rate. You can research the crime stats for a particular area from numerous websites, such as the Police Service – Crime Mapping website and others.
Spotting up-and-coming areas
This is quite a skill and can reap enormous rewards … if you get it right. Identifying an area that is currently not at the top end but that shows signs of improvement can prove to be the ultimate win-win. You’ll attract high rental income relative to the price you paid for the property. You’ll also do well when, one day, you choose to sell, as your property will have made strong capital gains.
You could begin by looking in an area next to a currently popular, expensive area. As supply outstrips demand, potential tenants will soon be looking for suitable alternatives in the area you’ve chosen. These alternative areas will probably share the same transport links as the expensive areas and may be in the catchment area of good schools.
How to evaluate potential Buy to Let property areas
The best way to carry out your due diligence is to carry out the legwork yourself. Visit the area during the daytime and night time. Are there any local issues that might affect values, such as traffic issues or noisy gangs?
What’s the mix of shops? Is there a preponderance of takeaways, charity shops or empty units? Or is there a variety of shop types coping for local need?
Are the local properties in good condition? Are the gardens well cared for?
Are there many flats in the area? Look at the number of bells on the doors of large houses to see if they have been sub-divided into flats.
How good are the local amenities?
Check out local transport. If it’s families you want to attract, then check out the local schools. How do they fare in Ofsted inspections? Clearly, better schools will be an attractive feature. You can gain a good impression by looking at the school league tables on the Department for Education website.
Try to avoid properties on busy roads, near busy railway lines, under flight paths or near industrial areas. Instead go for homes near shops, bars, restaurants, transport facilities and good schools.
Talk to a property investment specialist
Choosing the right area for your property is critical if you’re to make the most of your investment. Too critical to be left to chance. Always make sure you have a property expert as your partner.
Talk to us at Donelan Property. We know property. We know investment – and we’re here to help.
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