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.
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 024 77170170 or email: firstname.lastname@example.org