PLAY TO YOUR PASSION
There's nothing like being interested in something to make a good job of it.
You'll find plenty of content and sage advice around not making your buy-to-let business personal, but being a landlord – and, for that matter, being a managing agent – is nothing if not personal. Having a portfolio of homes that makes you proud and where people love to live is no bad thing - in fact, it's an inspiring life.
Without a shadow of a doubt, the property you'll enjoy owning the most is the sort of property you like. Maybe you're familiar with a certain style from having lived in one, or from being an admirer of a particular period or design. Either way, enthusiasm on viewings often leads to seeing the full business potential of a home.
The trick is to avoid getting emotional. You won't be living in the property, so it doesn't need to fit your lifestyle or personal decorative tastes. Still, you can certainly bring personality to your homes to help them stand out from the crowd and attract your perfect tenant.
FINDING YOUR SPECIALTY
Every neighbourhood has more than one marketplace. Think about the stages of life people go through: singles wanting their own space; friends that want to share; couples moving in with each other; families growing up.
It would be a tough call to know about every type of home in every street, so a better place to start is by asking local letting agents about the different sectors of the market. Once you're familiar with activity, demand and supply, you can make an informed decision about what's right for you. Maybe there's an untapped market just waiting for your talents.
Our landlords have different niches based around their own interests, preferences and experiences, as well as the local housing stock. Some put their trust in classic family homes; others favour small apartments and fewer occupants. Capital growth and prime locations can be a goal, as can the higher yields of cheaper streets. Knowing any of these well can give you valuable insight into beginning or expanding your portfolio comfortably and successfully.
DEEPEN YOUR EXPERTISE
For a rental property to be a success, it should reflect what people want and require minimal maintenance and repairs. By knowing your market and creating a durable home that encourages long-term tenancies, you'll keep your income as constant and passive as possible.
These pointers aren’t exhaustive, but as an idea of the differences to consider:
- family households need functional homes to cope with plenty of people and all-day use. That means lots of cupboard space in the kitchen along with a full-size dishwasher, a washing machine with a big load capacity and space for a large fridge/freezer. If you're renovating, keep at least one bathtub to make bath time for children easier – not to mention that a rubber duck is way less fun in a shower cubicle! Gardens with a lawn provide a safe play area.
- couples and singles create less wear, come with less stuff and still have the luxury of being style-conscious. They love sociable spaces where the kitchen is open to the living room, making quieter appliances a smart choice. If you're renovating the bathroom, replacing the tub with a walk-in shower will create that all-important showstopping moment. Outside, low maintenance patios and balconies are generally preferred.
BUILD A REPUTATION
Being known as a local landlord of popular rental properties helps you secure the best tenants at the best rents. When your letting agent can gush about your homes, it gives tenants a great deal of comfort to feel they'll be living somewhere that's expertly owned and managed.
Having a solid reputation also adds credibility to your offers when you're looking to expand your portfolio. Citing your existing successful properties will show that you're a professional landlord with a proven track record who can proceed without a hitch.
The same goes for when multiple offers are competing against yours. Sellers – and sometimes agents – can find it difficult to be entirely sure which buyer is the best one, but a chain-free and well-regarded local landlord is a sound proposition that can add a sense of much-valued security to a sale.
EXPAND WITH EASE
Suppose you're achieving a healthy rental income from one property in a neighbourhood. It's a safe bet that a similar home nearby will be just as profitable, so you can double down on your success to pick another winner.
Concentrating your portfolio provides a real focus for your business and makes it easier to identify a good prospect quickly. On the other hand, spreading your rental homes across several different towns or cities means you'll need to research every location. It can also be time-consuming to look after them all – you'll either need to find reliable contractors in each area, or multiple managing agents.
You'll also find new opportunities come to you when you're known as a reliable local landlord. When agents know your speciality, it makes it easier for them to help you expand your portfolio, and you'll be among the first people they think of when a candidate property comes up. This can be particularly useful where another landlord is selling and wants to find a buyer off-market.
Being a specialist is revered in almost every profession and makes it easier to excel in any given field. Well, you can apply the exact same logic to being a landlord. With a deep understanding of your chosen marketplace, you can make confident decisions much faster and attract more property to grow your buy-to-let business.