When it comes to investing in property, most landlords will decide on an investment strategy; often choosing one or two locations that they are familiar with and focusing their investments there. However, there are many more factors to weigh up along the way. Here, our Chartered Surveyors look at some of these considerations.
Older property vs new build
There are some reports that there is a growing trend for landlords to purchase new build properties over older houses. Despite the fact that new builds often carry a slight premium, the benefits may still outweigh the potential costs. Due to the recent rising cost of materials and labour, an older property which may require varying degrees of improvement works before it goes to market may be costly to upgrade. ‘Hands-off’ landlords may therefore favour buying a new build, which (in theory) will be ready to put on the market straight away.
The warranties offered by new builds are providing an attractive proposition for investors for the same reason. In comparison, older properties are likely to come with larger costs for ongoing maintenance and repairs. Rules around the EPC ratings in properties and the need for private rented accommodation to meet minimum energy efficiency standards (MEES) may also favour new builds over older, less energy-efficient properties.
Long term appreciation
According to Paragon Bank, 54% of buy-to-let properties in the UK are terraced houses. The smaller nature of terraced houses often places them at the cheaper end of the market; offering landlords the potential to generate a relatively high rental yield.
However, some landlords are bucking this trend to opt for relatively more expensive properties with the aim of a larger increase in property value over time. Rising property prices in more sought-after areas can see properties increase in value year-on-year and the greater the value of the property, the larger the increase in value this will bring over the years of property ownership.
Whether you are a landlord with a large existing portfolio or a prospective landlord considering your options, it is always worthwhile seeking the advice of a local Chartered Surveyor.
Lea Hough can offer advice to property investors to help them ensure they are following a sensible and profitable strategy. Our Chartered Valuation Surveyors can advise on the value of property types in an area and provide Valuation Reports on specific properties landlords are either looking to buy or sell.
Prior to purchasing any property, we would always advise a Property Inspection – either in the form of a RICS Home Survey Report or a more in-depth Building Survey Report. Even when buying a new-build property, it is important to seek a Surveyor’s advice in the form of a Snagging Inspection Report. Our Chartered Surveyors are able to assist with all of these reports; providing landlords with an informed perspective on the property they are looking to purchase. This helps to avoid any nasty surprises down the line that may require expensive repairs; therefore impacting the profitability of the investment.
For any further advice or assistance, our residential property team are able to help. Please contact us here.
