Thinking about investing in a buy to let property for your children? Read our guide to find out how to get started.
When deciding to invest in a buy to let property, it can at first seem overwhelming. Not only will you be parting with a not-inconsequential sum of money, choosing where and what type of property to invest in can be a challenge. However, you shouldn’t let this put you off. As mortgage rates remain at a record low, now is a good time to think about making your buy to let investment.
In order to help ease the stress, we’ve compiled a few different ways parents can invest in property for their children and take you through the best starting point for your purchase.
First we take a look at parents who are investing in properties for their children needing accommodation while at university.
Initially, you will have to do a certain amount of fact-finding; will your child want to live alone or with friends, and are they looking to live in the thick of things or a quieter residential area? Obviously finding a location is much easier when you have the inside scoop, so take full advantage of this by spending a couple of weekends with them getting to know the lay of the land. Properties near campus that are close to local amenities are usually the most sought-after, and if you wish to continue to let the property after your child graduates, it is worthwhile considering what most students are looking for.
The beauty of renting to students also means that – while you should ensure furnishings are functioning and of a certain standard – they can be more basic, designed to be durable rather than beautiful, but pricey. Furthermore, it’s important to keep in mind that if students move into a clean, comfortable property it is more likely to stay that way.
You can also make it the students’ responsibility to find other tenants if someone decides to move on, meaning that you don’t have to take a hand in the day-to-day running of the property.
Next, there are parents looking for a buy to let investment as a nest egg for their children’s future.
While investing in an area you know and live makes the start of a process easier, it is better to come from a purely business frame of mind, so studying yields and property price growth is key here. Research areas thoroughly and call local agents for advice. Areas such as Nottingham are well worth researching, as the property prices remain low in comparison to other major UK cities, yet yields are high. For instance, according to data compiled by property search portals, a four-bedroom house in Nottingham can see a typical return of 10.1%.
It’s also worth considering what type of tenant you want – if you’re looking to let to a family who tend to live in properties for longer durations and cultivate more of a ‘home’, research areas near good schools in commuter towns. If you’re after young professionals with a disposable income, look at slick properties near bars, restaurants and transport links.
Once you’ve decided on your property, you will then need to carry out basic checks – make sure fire regulations are covered and get the gas and electric certificates sorted. Lastly, be sure to get a HMO (Houses of Multiple Occupancy) licence if you decide to not let your property purely to families.
As always, a good estate agent will help with your buy to let investment and ensure a much smoother process. From the initial research period they can impart solid advice on where is best to start your search and, from there, help guide you through to completion. If you’re looking to buy, sell, rent or let, get in touch.