What do I look for in a rental property?

I have what's called a "niche strategy' in that I focus on single lets of high quality Victorian houses in a particular part of Maidstone that is quiet and safe, yet close to the station, for long-term sustainable returns. I refurbish the houses to a high standard to attract and retain top tenants.

Victorian house Penenden Heath Maidstone
My first buy to let Victorian house in Maidstone

These are the five things I look for when buying a rental property.


1. Location


Location is extremely important to me. I am a self-managing landlord, so it is vital that the houses are within easy reach of my home. This is not only useful during the refurbishment, as I visit almost every day, but also if something needs repairing, or even once when a renter needed keys urgently.


I look for a residential location that is and quiet, yet convenient for the shops and a mainline station with fast links to London, as many renters commute at least once or twice a week. It needs to be an area where renters enjoy living and feel safe. Choosing an up and coming area (a good sign is lots of skips!) means there are prospects for long term capital growth, and an increasing yield as the area continues to attract investment.


2. Pretty houses


I love Victorian houses, and I look for houses with great curb appeal, so the renters enjoy coming home. I like houses with the original brick at the front, which avoids the cost of having to paint the exterior every few years. I also like to see the quality of the pointing of the brick work, rather than wondering why the property was rendered int the first place.


I value original features internally, especially fireplaces and cornicing, and bay windows are a big attraction, because of the lovely light they bring into the room. In Project Alice, we put up a nice bay window curtain rail to make it easy for the renters to hang curtains, as curtain rails can be tricky to instal in bay windows.


I do not consider flats or leasehold houses, because of uncertainty regarding future levels of the service charge, and because freehold houses are a better long term bet for capital growth. I also don't buy new builds, because I prefer the high ceilings and space of Victorian houses. There is also more scope for capital growth and improvement with older houses.


Incidentally, I do look for houses that are already energy efficient, with an Energy Performance Certificate (EPC) C, as improving the energy efficiency of a house is expensive, especially if double-glazing, insulation and a new boiler are all needed. However, when considering a house, I will double-check the EPC on the government website to try to ascertain whether improvements have been undertaken since it was done.


3. Layout


I am very particular about the layout. I like to see two reception rooms, with the kitchen in the rear elevation, and the family bathroom upstairs. I prefer houses with a hall way, but I have bought one where the front door opens directly into the front room as the house was wider than average.


I avoid houses with the kitchen in the second reception room, as that can make the house feel cramped. Renters much prefer having the family bathroom upstairs, even if this makes the third bedroom a little small, and it's a bonus if there is an additional shower room or loo downstairs.


I prefer houses with three bedrooms as they are more popular with renters, especially if they work from home, although I will consider a two bedroom house if the potential yield is acceptable.


4. Fair yield


The potential yield is really important - I will not consider houses if I won't get a yield that reflects my investment in the property. Unfortunately, the recent spike in house prices means that many are too expensive as buy to lets, once the additional stamp duty is taken into account, as the rents don't match the investment, despite rents increasing recently. I also look for houses where the yield has the potential to increase, due to the area attracting more investment.


I know that yields are higher with houses in multiple occupation (HMOs), so-called "co-living", but I only have single lets as they are easier to manage.


5. Light refurbishment


I expect to need to decorate throughout, lay new carpets, undertake repairs, maybe replace appliances, and improve the outdoor space, if necessary. However, the more extensive the refurbishment, the higher the cost, and unless the property was bought significantly below market value to reflect the condition, there comes a point when the work needed will not be reflected in the rent. And I have learned that the more neglected the house, the more likely it is that more will need replacing or repairing that you initially assumed.


I therefore won't take on a house that needs a back to brick refurbishment, major structural changes and extensive investment. I'd rather leave that to the specialists, and focus on houses that only need a light refurbishment.


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I hope you found that useful. Please let me know what you think. What do you look for when buying rental properties? Are you in Team New Build or Team Period?



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