At the moment house prices are low, which means it is a good time for would be investors to buy a property that they want to let out to tenants. A growing number of people who are starting out in the property business buy their first investment property at an auction. When houses fail to sell or a local council has overstocked on rental properties, these homes usually end up being sold at auction. If you are considering buying a property to lease out then you need to make sure that you have a pre-set budget and stick to it. It’s all too easy to get carried away in the auction room and you need to remember that you will need some funds for refurbishing a property ready for tenants.
It is a mistake to purchase any property at auction if you have not seen it first and looked at the accompanying legal documentation. Viewings and documents are there for buyer protection, if you forgo this part of the process you could end up with a property that will cost you a small fortune to refurbish. Once you have a list of the properties up for auction have a good look round any property that you are interested in. If there are things that you are worried about then you may want to take a surveyor with you to pinpoint potential problems. If the roof is in a bad way it may have caused damage to the interior, should you decide to have a new roof, you need to shop around for value for money roofing supplies.
These days most tenants expect the interior of a property they want to rent to be in good order. While major tasks such as replacing the plumbing and electrics and fitting a new roof would need to be done to make the place habitable, tenants expect the interior to look good as well. If the windows are old and the frames rotting, you may want to change them for Velux Windows.
Modern tenants expect kitchens and bathrooms to be of a certain standard and if these are in a bad condition you may need to replace the bathroom suite and the kitchen units before you can rent out the property. These days most people prefer a neutral interior so creams and other light colours are best on walls and paint work. Many properties fail to sell due to the kitchen and bathroom, keeping it neutral is best, most people prefer a white bathroom suite and it is a good idea to get rid of anything other than a white one – especially if you want to sell the property some time down the line.
So me property investors already have a tenant in mind, or they find one by word of mouth. If you are just starting out you might want to find tenants through an agency as they will have experience in vetting potential tenants – which is good if you want to be sure that someone won’t damage the property or take off owing you a lot of money in rent.
Photo: Ben Salter