by Rosie McLean 
Finding the right rental property is essential to maximise your investment as a landlord. You don’t want a property that will sit empty because you’ve chosen badly. Here are five things to look for when buying a rental property.
- Location
Location is vital to making the right decision on a rental property. Choosing an in-demand area will maximise your chances of attracting tenants by making sure your property is suited to their needs.
Look closely at the immediate environment. Is it near to schools for families with children, for example? Close to the university for students? What are transport links like for professionals who might be commuting to the office? Is it close to the sea or open green spaces for those who appreciate nature? Does it have easy access to shops, bars and restaurants for tenants who like the city buzz?
We know the best rental areas along the south coast, especially in and around Southampton and Portsmouth. Ask us to advise you on the best location to choose.
2. Condition
When buying a rental property, you need a clear idea of what the costs might be – both for upfront preparation to ready the property for immediate occupation, as well as longer-term improvements for the future.
Does it need adaptation or renovation work done before you can rent it out or is it ready to go? Are there any aspects of the property that might need work further down the line?
Making the property look attractive is key to getting the right tenants to apply, quickly. But the amount you spend obviously has to make sense in relation to the return you expect.
3. Demand
Southampton and Portsmouth are the two cities with the highest number of student homes per square kilometre in the UK, according to a study by Unihomes. It’s a student hotspot! But rental properties don’t have to target just students. Let’s face it. Who wouldn’t want to live in a lovely area like this!
And there are still plenty of people looking.
In a 2023 report by finance broker, Finbri, 62.24% of landlords experienced increased demand for their rental properties in the last 12 months. This is likely to be due to the instability of the mortgage market combined with the UK economy putting pressure on household budgets.
4. Type of property
Knowing the demand in your chosen area will help refine who you want to let to, and therefore what kind of property you should be searching for. You might be wanting to let to a single person or a family or to sharers through an HMO (house in multiple occupation). Or you might be considering serviced accommodation or a holiday let.
Having a clear idea of the tenants you’re after will help narrow your search down to the best type of property for you.
5. Likely yields
Once you’ve considered all the above, you stand the greatest chance of maximising this last point – your likely yields.
The average rent in Southampton is £877 according to a survey carried out by HMRC’s Valuation Office Agency between September 2021 and September 2022. Rents start at £471 for a single room and rise to £1,494 for a house with four or more bedrooms. Average rents for Portsmouth are a little lower, at £884 – that’s £460 for a single room and £1,589 for a house with four or more bedrooms.
Between the years ending September 2021 and September 2022, average rents in Southampton grew by £51 (£39 in Portsmouth) – so buying property to rent along this area of the south coast is still a wise investment.
Here at Chimneypots, we know what landlords need to look for when buying a rental property. We can advise what similar properties are renting for and how quickly they are being snapped up so you can understand your likely yields. We can also manage your rental properties for you. Do get in touch to see how we can help.
