Unless you already own the property you’re planning on renting out to tenants, another rule on how to become a landlord is to find the right property.
The property you choose plays a big part in the overall success of your venture. Your property and area can mean the difference between high demand and strong yields versus void periods and low returns.
By doing research and taking the right steps when looking for your investment property, you give yourself a better chance of making high returns and securing desirable tenants.
On the other hand, if you’re thinking of renting out a property you already own, don’t worry too much. There are other ways you can make your property more successful which we’ll cover in this section of our guide to becoming a landlord.
Research Different Buy-to-Let Areas
One of the most important tips for landlords buying a property is researching the best buy-to-let areas.
In the UK, certain areas will have more to offer than others. The two requirements which are crucial to focus on when looking for the best investment areas are rental yields and capital growth.
Areas with high rental yields will ensure being a landlord is profitable, thanks to regular returns that come with renting out a property. Whereas capital growth represents the returns you will make on your investment if the property has grown in value by the time you come to sell it.
What are the Best Buy to Let Areas in the UK?
If you’re renting out a property to become a landlord in the UK, the best areas to focus on are those up North.
Compared to Southern regions in the UK, areas like the North West offer some fantastic potential for those renting out a house or flat.
Home to top property hotspot cities Liverpool and Manchester, the North West is definitely a UK area worth exploring before purchasing a new buy-to-let property.
Property prices in the North West are expected to increase by 28.8% by 2025, which is a significant rise compared to the UK’s predicted growth of 21.1%.
This means that purchasing a buy-to-let property in the North West is one of the best tips for becoming a landlord if you focus on capital appreciation.
For those seeking high rental returns, investing in areas like Liverpool is also a great piece of landlord advice since rental yields in many Liverpool postcodes are ranked some of the best in the country.
L1, for instance, is said to boast 10% yields making it the most lucrative buy-to-let postcode in the UK, according to Totally Money.
This shows that if you want to know how to become a landlord in the most profitable way possible, researching the top UK areas is essential.
Think About What Will Appeal to Your Tenant
While the city the property is based in is important, this isn’t the only thing that people becoming a landlord need to think about.
There are other ways to make your property stand out and boost your chances of a successful landlord journey, and creating a tenant profile is a good place to start.
By getting a good idea of the type of tenants you hope to attract to your rental property, you make it more likely that you’ll see high demand and potentially be able to benefit from a higher rental value.
In the UK, young professionals are the most popular type of tenant that landlords rent out a property to.
This is because renting is more common for this tenant type, as they may not be financially ready to buy a house of their own yet or prefer the increased freedom from renting.
If young professionals are the tenant group you plan to target with your rental property, you should aim to make your property as appealing as possible to these types of renters.
So what is the best landlord advice for selecting a property that’s going to appeal to tenants?
If you’re looking for a buy-to-let property and want to make sure your investment appeals to young professionals, you should focus on centrally located new-build apartments.
Renters who work in the city centre are more likely to want to live in proximity to their workplace and have access to all of the city’s top attractions, bars, restaurants, and shops.
New landlords who want plenty of demand and high yields should seek out modern and stylish developments based in and around the city centre.
If, on the other hand, you plan on renting out your home to another tenant type, such as a young family, you would need to focus on different qualities.
This would require purchasing a buy-to-let property based near schools and transport links and focusing on houses rather than apartments.
Keep in mind that if this is the route you hope to take, you may find that your yield is lower depending on the area you invest in, as apartments tend to be cheaper to buy while often having a similar rental value to houses.
Think of Ways to Add Rental Value
For soon-to-be UK landlords who already own the property they plan on renting out, you should focus on making the property as appealing as possible.
This is something to also keep in mind if you’re a buy-to-let investor planning on buying a property that needs refurbishment before it can be rented out.
If the property you own or will own is outdated, be sure to spend time and money refurbishing it to a high standard.
Properties with up-to-date décor and features boast a higher rental value and are more likely to see lots of enquiries from interested tenants. If you have the budget to do so, think of different ways to add value.
This could mean adding a conservatory or extension to the property, fitting a new luxury kitchen and bathroom, and transforming a yard or balcony into a beautiful outdoor space.
How Has Covid-19 Changed the Rental Market?
The Covid-19 pandemic has changed the UK rental market by encouraging a rise in demand for certain properties and properties with certain facilities.
Rental properties with a garden or balcony have risen in popularity over the past year due to the pandemic and the national lockdowns that resulted. Renters now want a space to spend time outdoors, and properties that can offer this are in high demand.
With more people now working remotely, rental properties with a home office or space for a desk area are much more desirable than in the past. Properties offering high-speed internet access are also being favoured for this same reason.