There are countless challenges that come with being a landlord, not least finding the right location for buying rental property.
Your property’s location is what determines your potential returns. So, it’s worth taking the time to finding the best location possible if you want to make the most out of your investment.
So, when it comes to location, what factors do you need to consider?
In this article, we’ll share five factors for choosing the right rental property location.
1- Potential rental yield
The yield of a rental property is essentially the potential returns of a rental property, calculated as the rental income taken as a percentage of its value. The average yield of a location is a gauge of the rental yield you can expect if you buy a rental property in that location. This value changes across different areas in the country. So, if you were based in the South West for instance, you might choose to buy a new house in Plymouth instead of Swindon since the former location has a higher average rental yield.
2- Supply and demand
It doesn’t matter how attractive your property, it won’t make you any money unless there’s strong demand from renters. Ideally, you want your buy-to-let to be in a location where the supply property supply is short, as this will help increase the amount rent you can make.
3- Proximity to home
The closer your chosen location is to your home, the easier it’ll be for you to self-manage your rental property. It isn’t practical to manage a property that’s far away, unless you have a set of reliable contractors in the area or outsource management to a letting agent. So, it’s best to choose a location that you can reasonably travel to on a regular basis.
4- Transport links
Access to transport is one of the key things that renters look for. Consider what transportation methods your target renters are likely to use, including motorways, bus stops and train links. Then look for a location that offers easily accessible links to this type of transport.
5- Amenities
You’ll also want to research the different facilities a location offers for renters to use. Consider where your tenants can find the nearest supermarkets, cafes and restaurant, green spaces and entertainment while living in the areas you might purchase your buy-to-let.
The bottom line
There are many factors to consider when choosing the right location for a buy-to-let property. But by considering the factors above, you’ll be well on your way to narrowing down your options. Any single location will rarely tick every box. But if it has the right combination for both your own needs and those of your target renters, then it could be a good fit.
