Buying investment property on the advice of estate agents alone
Your market research should also include talking to a local letting agent. Simply ask ‘what type of properties are you always short of’ to find out the properties and areas that will give you the best yield. Here at Anderson Hacking we have a vast knowledge of the local area and what properties will let quickly and for the best price, so DO speak to us first.
Not factoring in leasehold block service charges
When looking at the return from a property, charges can easily reach 20% of rental income. In older blocks you must establish that a significant ‘sinking fund’ has been built up by the leasehold block Management Company to pay for the replacement of major capital items such as windows, roofs, lifts and communal boilers. If not, it can be a very expensive experience for new owners to ‘pick up the tab’.
Not investing in kitchen and bathrooms
It costs relatively little to tile a bathroom and kitchen, and provide clean and hygienic new work surfaces. Kitchens and bathrooms are the main selling point of any property and a bathroom with both a bath and shower are the most popular. Fitting an extractor fan in bathrooms is also a helpful tip as it prevents the build up of moisture and condensation in the room therefore less decorating should be required over time. Anderson Hacking can recommend local tradesmen who are experienced in renovations both big and small, and who can offer competitive quotes to lettings clients in order to achieve the best possible presentation.
Not providing a parking space in a busy town location
A property with a parking space will let far more quickly with one without. If it is at all possible, make good suggestions for parking and even better negotiating a parking space to offer to tenants.
Not reviewing rent regularly
When a property is let ‘long-term’, allowing rent levels to fall behind the market rate can significantly impact on rental returns. Speak to us at Anderson Hacking to understand the rent increase procedure and how often this can be implemented.
Not putting up a ‘To Let’ board
If no board is erected, no one passing and no one locally knows a property is to rent, this can eliminate many good prospective tenants. Anderson Hacking always recommend erecting a To Let board and will do so unless otherwise notified.
Not carrying out proper reference checks
The most credible looking tenant and charming person may have an appalling rental history and a string of unpaid debts and may be ready to exploit the kindest of landlords. The only way to have peace of mind as far as possible to ensure proper checks are completed. Anderson Hacking are experienced in completing such checks and will discuss them with you every step of the way.
Not taking out rent guarantee and legal expenses insurance
This can be a very expensive mistake, especially when the economy and job market is so unsettled. For a very small sum in comparison to the risk of losing rental income, rent can be protected and income received whilst the eviction process is being carried out. Some policies will also cover legal expenses. Please speak to us for more information on policies.
Not managing tenancy lengths and renewing tenancies
By renewing tenancies on a fixed term basis, this ‘locks in’ future rental income, but many tenancies roll into periodic tenancy. Also, don’t consider a tenancy for six months that starts in June/July that will end in December/January when it will be much harder to re-let in the winter months, a tenancy can also be set for a twelve month period which is much more desirable.