Buy to let advice for property in Coventry

Buy to let advice for property in Coventry.

 

Once you have decided on the type of tenants in your target market, you are now positioned to begin your search for property in the Coventry area. Your inquiry will be strongly dictated by the type of tenants you are looking for.

Suppose your target market is students or overseas tenants. In that case, you will search for properties either in Coventry city centre or at most a ten-minute walk from the city centre or the Universities. However, your search can be much more varied if you are looking for private tenants.

You will need to decide on the property size you are looking for. There are many things to consider, but as a general rule, smaller properties will achieve a better return than larger on the residential lettings market.

For example, the average rental price for a two-bedroom terraced house will be around £495pcm at an average sale price of around £85,000 (6.9 yields). So buying a four-bedroom detached property at £250,000 at an average rental return of £900pcm (4.3 results) is not such an attractive return.
There are exceptions to this rule, and renting to students or shared accommodation can be 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 other factors must be considered. For example, if you are buying a property that needs a lot of work, you will need to include this cost in your figures. In addition, 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 of this are easy to see. Low maintenance, builder’s guarantees and parcels are usually ready to be occupied with minimum work required. However, the negatives also have to be considered. Annual maintenance charges, ground rents and long-term resale potential (i.e. how easy will the property be to sell in ten or twenty years?). Whilst both are viable options, ensure you are thorough with your figures and planning when making your decision.

With the increasingly fast mortgage application process, the amount of upfront capital needed has increased. As a result, the number of lenders offering 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 provide you with products from all lenders.

I hope this guide helps you search for property to buy in Coventry. However, this is only a general guide based on personal opinion. If you require further information or want to make an appointment with one of our advisors, don’t hesitate to contact us at 024 77170170 or email: lettings@matthewjames.uk.com.