Estate Agents Coventry | Abode

Things to consider when looking for buy to let property in Coventry. Part 2.

2012-02-02T02:16:00.000-08:00

Once you have decided on the type of tenants that are your target market. You are now in a position to begin your search for property in the Coventry area. Your search will be strongly dictated by the type of tenants you are looking for. If your target market is students or overseas tenants then you will be searching for properties either in Coventry city centre or at most a ten minute walk from the city centre or the Universities. If you are looking for private tenants then your search can be a lot more varied.

You will need to decide on the size of property you are looking for. There are many things to take into consideration but as a general rule smaller properties will achieve a better return than larger on the residential lettings market. For example an average rental price for a two bedroom terraced house will be around £495pcm at an average sale price of around £85,000 (6.9 yield). So buying a four bedroom detached property at £250,000 at an average rental return of £900pcm (4.3 yield) is not such an attractive return. There are of course exceptions to this rule and renting to students or shared accommodation can work out more financially lucrative. To work out the rental yield of a property you can use this simple calculation as a rough guide:

Annual rental income received divided by investment amount times by one hundred. i.e £495pcm x 12 / £85,000 x 100 = 6.988 yield.

A good yield is all well and good but there are other factors to consider. If you are buying a property that needs a lot of work then you will need to include this cost in your figures. There may be other additional costs such as furniture if you are renting to students or overseas tenants and there may also be ongoing costs such as property repairs and replacement of items due to wear and tear.

Many investors opt to purchase modern apartments ahead of traditional terraced properties. The benefits to this are easy to see. Low maintenance, builder’s guarantees and properties are usually ready to be occupied with minimum works required. The negatives have to also be considered. Annual maintenance charges, ground rents and long term resale potential (ie how easy will the property be to sell in ten or twenty years time?). Whilst both are viable options make sure you are thorough with your figures and planning when making your decision.

With the increasingly tight mortgage application process the amount of up front capital needed has increased. The number of lenders who will offer buy to let mortgages with a 20% deposit has decreased. When finding a mortgage you may want to see an independent mortgage advisor as they can offer you products from all of the lenders. Having a larger deposit will not necessarily benefit you long term. Many investors try to keep investment capital in their properties at a minimum. The reason for this is that interest payments can be written off against your tax bill. So by leaving more money tied up in the property and decreasing your interest payments you will also be increasing the amount of tax you pay. All profits from rental accommodation are taxable at 40%. In a growing market investors are not looking to make money from the short term rental income but are looking at the bigger picture and profiting from the long term increase in value of their investment.

I hope this guide helps you in your search for property to buy in Coventry. This is only a general guide and is based on personal opinion. If you require further information or would like to make an appointment with one of our advisors please contact us at info@abode-estateagents.co.uk

Estate Agents Coventry

Letting Agents Coventry

Estate Agents Coventry, Abode at http:www.abode-estateagents.co.uk/

Things to consider when looking for buy to let property in Coventry. Part 2.

2011-09-05T07:16:00.000-07:00

Once you have decided on the type of tenants that are your target market. You are now in a position to begin your search for property in the Coventry area. Your search will be strongly dictated by the type of tenants you are looking for. If your target market is students or overseas tenants then you will be searching for properties either in Coventry city centre or at most a ten minute walk from the city centre or the Universities. If you are looking for private tenants then your search can be a lot more varied.

Annual rental income received divided by investment amount times by one hundred. i.e £495pcm x 12 / £85,000 x 100 = 6.988 yield.

Estate Agents Coventry

Letting Agents Coventry

Things to consider when looking for buy to let property in Coventry.

2011-07-07T03:17:00.000-07:00

When looking for a property to purchase for the purpose of buy to let there are many things to take into consideration when choosing a property. Coventry like many major cities has a diversity of people who rent for a number of reasons. They can be roughly broken down into three main groups:

· Private Tenants (either local or relocating from UK)

· UK Students

· Overseas Tenants (Students or on employment contracts)

When buying a property to rent in Coventry it is crucial that you have a target market in mind before deciding on the kind of property to buy. Each of the different groups has different requirements so by deciding on your target market you can then decide on the kind of property to search for.

Private tenants in Coventry tend to be the most varied in the type of property they require. Generally if they are local they will be looking for rental property in or around a specific area that they are familiar with. If they are relocating to Coventry they may not know the area so may want to be near Coventry City Centre, within easy access to the motorways’ or where their employment will be based.

As private tenants are more likely to be looking at longer term tenancies many have their own furniture. This means that as a landlord you would be able to market the property unfurnished you would save money on the initial costs of preparing the property for the rental market.

Because of the variety in property that private tenants are looking for any property can be considered. This means that if you choose this group as your target market the type of property is not the most important consideration but as private tenants tend to pay a lower rent than the other two groups property value against rental return will more than likely be the most important factor for an investor.

UK Students are going to want to have easy access to the University that they will be studying. Ideally the accommodation would need to be within walking distance of Coventry University or Warwick University. UK students often stay in accommodation supplied by the University for their first year and usually look for shared accommodation if their courses last longer. Because of this there is a lot of demand for larger properties near to the Universities. Groups of students searching for rental property in Coventry tend to be looking for three, four and five bedroom properties and on average will pay £250 per calendar month for each tenant.

When doing your sums you need to consider added expenses that may be incurred by renting to this group ie. All properties need to be furnished, larger properties with multiple tenants may be classed as a HMO’s and students are usually only looking for ten month contracts leaving the property empty and not producing rent for two months every year.

Overseas Tenants have dramatically increased in numbers over the last few years in Coventry. Whilst they are mostly searching for similar accommodation to UK students they tend to be in smaller groups often only looking for one and two bedroom furnished accommodation. As they are new to the City most want to be inside Coventry City Centre and will only consider high quality modern accommodation and are prepared to pay a higher price to secure a better quality of property. Many are funded by their government and tend to be a few years older than the traditional UK student. Whilst many return home for the summer months many continue to rent property to assure they have accommodation when they return often staying for up to three years.

Estate Agents Coventry

Letting Agents Coventry

Here at Abode Estate Agents in Coventry it is our aim to offer a high standard of service and the aim of this blog is to help our customers with advice on all aspects of property rental and Estate Agency services. We start here with a guide to help potential buy to let investors in choosing the right property. These guidelines are here to help but if you are considering purchasing a property please feel free to contact us so we can discuss in more detail. Please feel free to contact us through our website www.abode-estateagents.co.uk or call our office directly on 024 76228640.

Abode Estate Agents will now be posting news articles. Follow us on Twitter and through our website, Estate Agents Coventry,

2011-05-09T09:28:00.001-07:00

Abode Estate Agents will now be posting news articles. Follow us on Twitter and through our website, Estate Agents Coventry, Abode at http:www.abode-estateagents.co.uk/

Abode Coventry Estate Agents

2011-01-19T03:43:00.001-08:00

Abode Estate Agents will now be posting news articles. Follow us on Twitter and through our website, Estate Agents Coventry, Abode at http:www.abode-estateagents.co.uk/

Abode Estate Agents Coventry

2010-12-13T12:23:00.000-08:00

Abode Estate Agents will now be posting news articles. Follow us on Twitter and through our website, Coventry Estate Agents

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2010-10-28T08:04:00.000-07:00

News articles from Abode Estate Agents in Coventry. Keep up to date with property news and articles.

2010-09-10T04:59:00.001-07:00

Abode Estate Agents Coventry

2010-09-10T04:11:00.000-07:00

Abode Estate Agents will now be posting news articles. Follow us on Twitter and through our website, Coventry Estate Agents .