What to look for when buying an apartment to let
For new buy-to-let investors, or for landlords who have never invested in an apartment before, you may require a little guidance before you start your search for an apartment. When buying an apartment to let out, there are specific factors to take into consideration, factors which may not be relevant if you were looking for a house.
Once you’ve chosen the general area you’d like to invest in (this conclusion should be reached after carefully weighing up a list of factors to determine the level of tenant demand, including local employment opportunities, amenities, entertainment attractions, proximity to schools and universities, transport links, crime rates, the average rents, and any plans for future development), you’ll need to decide what you’re looking for in terms of property. If you’d prefer to invest in an apartment dwelling, then there are things to bear in mind before you start viewing properties.
New or old?
This is not a straightforward question to answer, as a property’s value is based on many different factors, such as location, the socio-economic environment, land size, and design, among many others. A new property may be more energy-efficient, with lower running and maintenance costs, but then an established dwelling may offer unique and attractive features which may appeal to more tenants. Whether you choose to buy new or old will largely depend on what’s available in the area you want to invest in, and what offers the best value.
Think twice about buying on the ground floor
Ground floor apartments in communal blocks can offer good value for money, but there are things to consider. Security, for one. The first-floor is the first – and easiest – point of access to a building. Noise can also be an issue. Does the apartment look out onto a busy main road? Would you hear the apartment building’s main door open and close every time someone enters or leaves the building? How much natural light will be allowed into the property? If you’re on the ground floor, privacy may also be an issue. These are all things to consider if viewing a ground floor apartment.
What’s the size?
Newly-built apartments are getting smaller, especially in London, where there’s a scramble for every spare inch of space. When working out what would be the best investment, consider the cost per square metre. A one-bed or two-bed apartment will be easier to obtain a mortgage on, easier to let, and easier to sell later on than, say, a studio apartment.
Check for extra maintenance costs
If you’re thinking of buying an apartment in a larger, communal building, remember to check in advance whether there are any annual maintenance or building charges. These can prove substantial, and you may decide you’d rather buy an apartment somewhere where you don’t have these additional costs.
There is still high demand for rental properties in London. Many young professionals and young couples priced out of buying in London need one-bed flats to rent, and if you invest in the right area of London (the outer boroughs are seeing greater price growth than the inner boroughs at present), you can expect your investment to be profitable.
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