Tailoring your property search for a target market
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)
• 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.