Securing the best return for your buy-to-let
Tamara Price, Lettings Manager, highlights a few things that a landlord can do to help secure the best return on their investment...
Any landlord that's letting out one or several properties is likely to be keen on ensuring their investment yields a healthy monthly rental profit while the property also continues to appreciate in value. Of course, the reality isn't always quite as straight-forward as that as often a property will have a tendency to have one return that's stronger than the other. This leads us to a key question - as a landlord, what kind of return are you hoping to achieve from your rental property?
Once a landlord understands the realistic financial returns they are looking for, be it on a monthly or longer-term basis, they can then start considering some finer details to ensure they secure a healthy return on their buy-to-let investment.
Re-mortgaging to a better product
One of the greatest savings a landlord can make is by re-mortgaging to a cheaper buy-to-let product at the end of a fixed term. Once the fixed term ends, there's a good chance your monthly repayments on the property will increase. However, now that you're no longer tied down to that lender you have the chance to shop around for a better deal, potentially saving you hundreds or even thousands every year. It may be worth working with a reputable mortgage-broker for sound advice and to help secure the best deal for you.
Understand the local property market
The property market can be dissected into many micro-markets. Now, take Cardiff for example - a vibrant, growing city with a diverse population and many suburbs. A rental property in one area of Cathays may perform very differently to another rental property in one area of Cardiff Bay. Different property values, rental prices, potential tenants, local trends and so on. For this reason, it's vital you gain a sound understanding of the property market in the exact location of your rental property, or any rental property you're looking to invest in.
New build or an older property
The type of property you invest in should reflect the type of tenant you wish to cater for. A new-build property may be ideal for those targeting young couples or families, as well as older couples who are perhaps looking to rent a property that needs less up-keep. New-builds may come with a premium, but they do have warranties and guarantees that should mean low maintenance costs for at least the first 10 years. Older properties may target established families who are looking to let in a particular area where perhaps new-builds aren't even an option or for those who appreciate the traditional character of an older house. They also lend themselves well to the student market if in the right location and also tend to have larger rooms which make them an ideal choice for landlords looking to let Houses in Multiple Occupation (HMOs).
Hold on to reliable tenants
Replacing a tenant can put a dent in your profits, most notably due to the potential void period where there may be a certain amount of time that passes without any rental income. Tenants won't put up with sub-standard property conditions or a property that doesn't make financial sense for them to continue renting. If you already have reliable tenants make sure you keep them happy by being proactive with maintenance issues and contract renewals. If you want to increase the rent, there should be a justifiable reason as to why this is the case otherwise you risk losing these reliable tenants, leaving you with a void period and the process of having to find new replacements.
Our knowledgable lettings team here at CPS Homes are ready to offer the advice and services you need to gain the best possible return from your rental investment. From listing your property, sourcing tenants and offering a range of property management services, we're here to help. Contact us today by calling 02920 668585, e-mail enquiries@cpshomes.co.uk or pop into one of our three Cardiff branches.
