What are the top 15 questions every landlord should ask themselves before investing

The experts at Belvoir Lettings have the answers...





1.) What is the tenant demand in the area?

"The type of investment property you are looking for should be dictated by what the local area is in need of," says Harpreet Garcha, proprietor of Belvoir Kettering."In Kettering, for example, we need more three-four bedroom recent-build properties close to schools. There are, at present, sufficient apartments and small terrace properties available to let."

Rick Flay, proprietor of Belvoir Sheffield, agrees. "Research of the tenant demand in your location is critical," he says. "Research the area and find out what type of properties rent easily. Some areas are in need of extra one-bed flats to let while others appeal to the family market and are in need of more three-bed houses."

Also, think about who's going to be renting your property. Is there a major source of tenants already available in the area where you're looking to invest, such as a university campus or a medical facility? If so, capitalize on this demand - but, as Terry Lucking, proprietor of Belvoir Peterborough and Corby, warns, "Make sure you are not relying on just one or two sources of tenant supply, such as a local hospital or college - should a major change occur you may struggle to let your property."



2.) Is the area already flooded with rental properties?

"Research the area in which you are buying in order to ensure there is not already an over-supply of rental properties," says Harpreet. "Clearly, the lower the supply to tenants the higher the likely demand there will be for your property."

Proprietor of Belvoir Camberley, Craig Walker, adds, "Landlords should always check that the property they are buying is not in an over-saturated area as this will mean a lower monthly rental figure and therefore lower rental yields."

"See what properties are renting well," agrees Lee Shuell, proprietor of Belvoir Oldham. "In certain areas there is an influx of the traditional two-up/two-down terraces. These tend to be on the market longer as there is plenty of properties for the tenant to choose from."



3.) Will the property be desirable to tenants?

"Is the property attractive to the eye - if not, don't bother," says Terry Lucking. "Make sure the property you are considering buying is one of the most attractive on the street - and the property needs to be in the best area too if you want it to let quickly. How attractive the property is will determine how desirable it is to a tenant and will help when you are competing against others."

The question to ask yourself is, 'Would I want to live there?'



4.) Does it need major renovation work?

"I always go on the three golden rules," says Wayne Mearns, proprietor of Belvoir Southend-on-Sea. "1. Roof. 2. Décor. 3. Heating system. Sometimes the visual clues give the possible price to pay once bought."

If in doubt, take a structural or building expert along to the viewing with you for a second opinion.



5.) Should I invest in a leasehold or freehold property?

Leasehold? Or freehold? "Some investors prefer freehold as there are no yearly management fees to pay," says Wayne. "But this is not always best. On a leasehold property the communal areas and building are usually managed by agents and it's easy to see if these are in a good state of repair. Leasehold fees may prove to be either worth it or overpriced, so it's worth considering both options before making a final decision."



6.) Will the rental return outweigh costs?

Think carefully about your budget, outgoings and potential rental return before making a commitment. Do all the figures add up? And, will you be left with a healthy profit?

Lee Shuell of Belvoir Oldham advises, "Make sure that you can get a good return on the property rental. Remember that there may be some months where repairs are needed or other times when you have a period of void - both of these will eat into your profit."

So, do your sums before signing on the dotted line, factoring in a slush fund for unforeseen circumstances or emergencies.



7.) Does the locality have good amenities and schools and are there good transport links or a major road network nearby?

"The highest rents are achieved in areas that have a good 'attraction', such as a train station or quality-branded stores," says Harpreet Garcha. "Such properties are likely to let quickly due to this attraction." Good local schools are also often high on a tenant's wish list when searching for a rental property.



8.) Do I need to get a specialist insurance?

"Make sure you look around for the best insurance products - ensure that the buildings are covered and you are also covered for malicious damage caused by the tenant," advises Lee Shuell of Belvoir Oldham. "Most good letting agents will offer this insurance and, for the cost, it is definitely worth taking out."



9.) Does the property have adequate parking and outside space?

In terms of desirability to tenants, a garden and parking can make all the difference between them choosing your property or another.

"Properties with outside space can increase the living area of a dwelling and are particularly popular with young couples who do a lot of their entertaining alfresco," says Neil Jones, proprietor of Belvoir Cambridge. "Families with young children also say they are attracted to properties with space for their kids to run-around or a have a paddling pool. And, for tenants with pets, outside space is a real plus."

A well-maintained front garden and weed-free gravelled driveway can also make a big difference to first impressions when a prospective tenant has a viewing. "Having space for off-road parking can even add a premium to the monthly rent you can ask," adds Neil.



10.) Could the property be turned into a HMO?

To maximise your property's appeal to a wide market of tenants, think about whether the property could be split into separate units if it doesn't let easily as a single property. "Buy a property you can let as rooms," suggests Terry Lucking. "This could potentially insulate you from high interest rates and insufficient rent as a family home. Make sure any investment property has bedrooms ideally of at least 100sqft (9.5sqm)."



11.) Will there be any hidden charges?

On most property purchases you're going to have to put aside some budget for solicitor's fees, local searches, stamp duty and renovation costs... but, remember, if you're buying into an apartment complex you will probably have annual management charges to pay out too.

"Any prospective landlord should carefully consider management charges levied on apartments, since the yield you will achieve on letting the property would be somewhat lower once these charges have been paid," says Harpreet Garcha of Belvoir Kettering.



12.) How environmentally-friendly is the property?

"Tenants are becoming increasingly conscious of the environment, so selecting a property that achieves a high ranking on an Energy Performance Certificate (EPC) would make it more attractive than one in which double-glazing or wall insulation is needed," says Harpreet.

Remember, too, poor insulation is going to cost your tenant money on higher energy bills, which may make another property a more cost-effective solution for them.



13.) Will the property require much on-going maintenance?

How much is the property going to cost to maintain? All properties will need money put aside for general upkeep - but some properties will eat into your maintenance budget more than others. Terry Lucking says, "Try to prevent unnecessary future expenses by choosing your investment property wisely. Also, put aside funds needed for improvement and presentation - and remember, the costs are often more than you initially budget!"



14.) Will the property appeal to both renters and buyers so I can also benefit from capital growth when I decide to sell?

Weigh up the capital growth potential as well as the rental return before a purchase - a property needs to appeal to both buyers and renters in order to fulfil it's short-term and long-term investment potential.

"How you plan to exit the investment should be decided before you buy it," says Terry Lucking.



15.) Can a letting agent help me find the right investment property?

"Landlords should speak to various letting agents and see what they have on the market at the present time," says Lee Shuell. "Ask how long properties are staying with them and ask them what the demand is in the local area."

Wayne Mearns adds, "Speak to an independent letting agent before purchase in order find out if it's the right property for investment. Sometimes I visit properties for sale on behalf of investors and produce a report on work needed, achievable rental returns and, more importantly, rentability in order to minimise potential for void periods."

Rick Flay agrees. "Use a good agent, such as Belvoir, to get the real story locally," he says. "Remember the sales agent will want to sell you the property and may not be an expert on lettings in the area."



• Belvoir Lettings now have more than 140 offices nationwide. To find your nearest Belvoir office, visit their website at www.belvoirlettings.com



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At-a-glance checklist - essential questions to ask yourself before investing...



1.) What is the tenant demand in the area?

2.) Is the area already flooded with rental properties?

3.) Will the property be desirable to tenants?

4.) Does it need major renovation work?

5.) Should I invest in a leasehold or freehold property?

6.) Will the rental return outweigh costs?

7.) Does the locality have good amenities and schools and are there good transport links or a major road network nearby?

8.) Do I need to get a specialist insurance?

9.) Does the property have adequate parking and outside space?

10.) Could the property be turned into a HMO?

11.) Will there be any hidden charges?

12.) How environmentally-friendly is the property?

13.) Will the property require much on-going maintenance?

14.) Will the property appeal to both renters and buyers so I can also benefit from capital growth when I decide to sell?

15.) Can a letting agent help me find the right investment property?





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