Nottingham again finds itself at the top of the ‘Places to Invest’ list, with numerous Sunday paper articles driving landlords to our streets paved in gold.
Lower purchase prices compared to other cities, a burgeoning supply of tenants, and relatively attractive yields are making the city an attractive proposition for landlords looking for long-term investments.
With more significant legal changes on the way, many older landlords are deciding that they’ve had quite enough legislation as it is over the past twenty years or so and they’re putting up the For Sale boards and exiting the market. The properties they are selling are typically smaller starter homes, or larger shared HMO’s with the latter being snapped-up by professional landlords to add to their portfolio. Of the starter homes, there has been a battle over the past few years between first-time-buyers and smaller landlords. In our experience it has often been the first-time-buyers armed with hefty deposits that win. The rise of interest rates in response to the cost of living crisis is however turning off first timers, many of whom are instead choosing to carry on renting until the dust settles.
A cursory browse on the property portals at the moment sends out a very clear message, with the majority of two bedroom houses around the city centre being advertised as investment properties, often with a tenant in situ.
Landlords looking to purchase are however being warned to tread carefully and do their due diligence before jumping in two-footed.
For instance, beware the dreadful new term ‘Under Rented’. You may find that what is being advertised should also state ‘Under Invested’ too. Yes, you may be able to increase the rent, but do you need to fit a new roof, kitchen, or windows before you can do it? Factor that in to your offer…
Think about the management & refurbishment If you live miles away, who is going to look after the house for you, and who is going to carry out the refurbishments? If an agent is happy managing a house that’s in dire need of work – are they the agent you want representing you? Think about the level of rent that is being claimed as a realistic increase – is it realistic without spending £000’s. You’ll want to avoid investing in a money-pit with an unhappy resident that has a list of outstanding jobs as long as their arm?
Do your homework, and do your maths too. You don’t need a surveyor to spot the need for damp proof courses, a new boiler, or a new roof. Factor in management fees, improvement costs, licensing requirements, and importantly make sure you aren’t buying a house that you think you can rent to sharers, only to find out that you aren’t allowed.
If you need somebody on your side, give us a call. For the past 20 years we’ve been helping landlords like you source property that they can rent out. If you aren’t local, or you just need advice, we can help you navigate your way through the waffle and the dodgy refurbs to find a nest-egg that any tenant will be proud to call home.
Call us today to find out how we can help. 0115 9629770