Investment Buyers

Buy to let investors form a significant sector of the sales market, especially amongst those properties that are perceived as highly rentable to students, young professional couples or corporate family tenants.

A highly rentable property is one that should always be in demand with the least probability of any void periods where there is no tenant and therefore no income.

Ideally, the minimum period for a rental should be always be for one year with an option for the tenant to renew thereafter.

Whilst the criteria for tenants varies according to each locality, in terms of proximity to amenities, average budgets and access to transport, the overriding factor should be that the property is presented in the most attractive and inviting manner. Imagine you are a prospective tenant, would you rent your property?

Investors quite naturally analyse the rental return by determining the yield; being the net annual income as a percentage of the total cost of purchase which is determined as follows:

  • Purchase price
  • Stamp duty
  • Legal costs
  • Furnishings
  • Refurbishment
  • Cost of Statutory Lease Ext (additional 90 years) if applicable

COST OF PURCHASE

£ Annual Gross Rent Less: Agent’s fee ( ) Annual maintenance ( ) Service charge (if applicable) ( ) NET ANNUAL INCOME £ ANNUAL NET YIELD %

However, buy to let investors should not just fixate on the yield without having regard to the current worth and future value. Bricks and mortar appreciation is equally as fundamental as the immediate yield, which demonstrates the time it will take to recoup your investment.

Some investors will buy and hold as part of their retirement plan, whilst others may sell after an initial holding period of five years and take the capital gain.

Our Advice?

Buy the most desirable property in the area of your choice that will always have the best chance of being let, whatever type of property falls within your budget. This could range from a studio flat in Central London or a five bedroom student house close to a University. Then look to the annual net yield as a percentage return on your investment, and lastly determine the capital appreciation compared to other similar buy to let investments.

JAC Strattons has been selling and letting to both overseas and local parties since 1975 and are always available to give you the best advice.