When it comes to finding a new home for yourself, you’ll obviously want to look at things like the price and the condition of the property, but the end of the day, you’ll make your final decision based whether or not you love the idea of making it your home.
However, when it comes to finding the right property for buy-to-let investment, you have to pay attention to different things. After all, it’s not you who’ll be living in the property, so more practical matters become more important. That’s why today, we’ll take a look at some of the different things to keep in mind when you’re looking to buy an investment property.
Choosing the right location
The first thing you have to keep in mind is the neighbourhood the property is in. Good access to public transport and local amenities is key, and you should also keep an eye out for things like crime rates and the levels of noise and unrest at night.
The Scottish Index of Multiple Deprivation offers an interactive map that can help you easily visualise the amount of crime as well as thing as health and employment levels in any given area. Talking to people who actually live in the neighbourhood and visiting it at several different times of the day is also helpful. However, if you don’t live locally, a property investment manager based in the area is your best source for information like this.
What amenities are the most important will depend on your rental target market: families with children will look for good local schools, students and young professionals tend to want a lively atmosphere with bars and restaurants, while older people appreciate a quiet neighbourhood with a grocery store and post office within walking distance. People of all demographics can appreciate things like nice parks, gyms, cinemas and shops.
It’s also important to do research into the average house prices in the area and how it’s been trending over the last few years. Everyone wants to buy property in an up and coming area, so take a look at average property prices from the past few years on a website like Zoopla and keep an eye out for things that could rise prices in the neighbourhood in coming years, such as fancy new leisure or retail developments and major companies moving to the area.
You should also pay attention to the rental market in the area: are there many vacancies? Are the streets littered with “To Let” signs? This could be due to seasonal cycles, such as students returning to university, or it could be a sign of a neighbourhood on the decline.
Additionally, if you plan to handle landlord duties on your own, you’ll need to choose a neighbourhood within a manageable radius from your own home. That’s why working with a property investment manager is so useful: you can widen your search radius considerably when you don’t have to stick to a commutable distance from yourself and can harness your property manager’s expertise in the local property market.
Finding the right type of property
The type of property you choose will influence the type of renters it’ll attract: larger flats and houses with multiple bedrooms will attract families, but could also be suitable for HMO renters like students and groups of young professionals. Meanwhile, smaller properties will suit young couples and older renters.
Carrying out a thorough home inspection with the help of trusted professionals is vital. After all, nothing can eat into your profits quicker than a previously undiscovered damp issue or leaky roof. Make sure to get several quotes for any major repairs needed so you can have a better idea of the true cost of the property.
Finally, it’s important to remember that functionality is key when it comes to rental property. You don’t need the flashiest flat in the trendiest neighbourhood to make property investment profitable: a highly usable, warm and safe home will attract stable, long-term renters for passive income you can depend on.
Considering the condition of the property
The idea of buying a real “fixer-upper” and selling it on with considerable profit is, understandably, an attractive one. However, you’ll need to be realistic about how much time, effort and money you’re able to put into getting the property ready for tenants and/or reselling.
Additionally, properties with existing problems often have more issues than anticipated once you get to work. And it’s important to remember that the time you spend fixing up your buy-to-let property before tenants move in is also time you’ll have no rental income from that property for support.
Especially if you’re new to property investing it can be easy to underestimate the budget and timescale required for major upgrades and renovations. Unless you know a dependable contractor who can do the work on the cheap or are experienced in doing work like this yourself, we don’t recommend new property investors to get involved in a house flipping project.
How Cox & Co can help
If you’re interested in getting started in property investment in Scotland, Cox & Co can offer you support every step of the way. We can help you find the right investment property in the right area, help you find the right buy-to-let mortgage and find and manage tenants on your behalf. We’ll even work with you on your overall investment strategy, growing your property portfolio sustainably.For more information, check out our guides to property investment in Edinburgh and Glasgow as well as the rest of our informational blog articles. To start your Scottish property investment journey, get in touch with us today.