Choosing which properties to invest in as a buy-to-let landlord is one of the most crucial parts of the process. You need to find properties in desirable locations at a good price where the rental market is strong. You must always do the due diligence to work out how much you can make per month from the property to ensure it is a viable investment. Sometimes choosing the right property can go very wrong, problem properties can end up costing you far more than you take in and become difficult to sell on. Here are some tips on how to spot those problem properties so that you can avoid getting into financial difficulty with a bad buy.
- Water Problems
Estimates put the typical cost of rising damp problems at between £1,000 and £5,000. Water damage is relatively easy to hide so try to look under rugs/carpets and behind furniture when viewing a property and ask the seller/agent about any damp problems. Some older properties do not have damp courses and many mortgage lenders will ask for one to be put in before giving a mortgage. Any water damage inside a home is problematic and can go on to affect the structure of the property so make sure you get a full survey and do as much research as possible into the history of the property before purchase. Turn on taps and try flushing toilets if possible when you view a property, as low water pressure can indicate costly plumbing problems.
- Structural Problems
To fix a subsidence problem could cost between £5,000 and £20,000 so factor this in if the survey comes back with any such issues. Structural cracks are even more of a liability, with solutions ranging from cheap crack filling to expensive repairs in the tens of thousands. A survey will reveal structural concerns but you will save on the cost and time of having a survey done unnecessarily if you look for cracks, leanings and other tell-tale signs when viewing prospective properties.
- Costly Repairs
Other costly repairs are rewiring, boilers and windows so take a good look at the condition of the property in these areas. Windows that have a lot of condensation or that are misty inside may need replacing, wooden window frames will also eventually rot and are more difficult to maintain. If the owners are using a lot of extension cords that could indicate an old wiring system, ask when the property was last rewired and look at the fuse box. An old boiler will greatly add to the cost of heating bills which can put tenants off so make sure you consider this too. The cost of replacing a boiler will be in the thousands and if you need pipework alterations or new radiators it can soon add up to a very costly repair.
In today’s society a high speed internet connection is a must for most people. Tenants will be interested in the available broadband speed so you should check this out before purchasing a property. You can use a site such as this one
to find out about the internet speed in the area.
The location of the property is important in several ways. Some areas are renowned for traffic problems or parking difficulties. Think about the type of tenant you are looking to get and consider whether there will be a parking issue at the property and whether there is a workable commute to the university/ city centre etc. Another location issue is the neighbours. Problem neighbours will put off potential tenants and hinder the selling on of the property in the future. Try to visit the property at different times of day to see whether the neighbours are very noisy and look at their garden and property from the outside to see how well they maintain their home. Remember to ask the seller about the neighbours too. For any further advice on your property management business do contact the team at Nick Fox Property Mentoring. We have a range of resources, books, courses and mentoring programmes to help you.
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