Many homeowners buy a property because they’ve fallen in love with it. But for landlords, this can be dangerous. Here, we explain why buy-to-let investors should never love their rental properties.
Investing in any asset class is a serious, and big, decision. It takes lots of planning and research, and should be considered from a matter-of-fact perspective. However, property is
often treated very differently.
We all think we understand property; most of us will own a home at some point. So taking the next step and creating a portfolio of investment properties may seem a natural progression.
So what’s the difference? Why can’t we love our rental properties?
To begin with, when you invest in property, you are seeking financial gain. It’s true; you may be seeking high capital gains on your own home, but judging by recent research, which suggests that homebuyers purchase a property because they love it, there is a more emotional connection with your residential property than with a rental home.
It is vital that when making a property investment purchase, the heart doesn’t rule the head. Naturally, lifestyle and location plays a vital part in purchasing any type of property, but don’t let your lifestyle or location of choice be an influence.
You may love an area and think it is the perfect place to live, but will tenants? Rental property locations are naturally different to owner-occupier locations – consider who will rent the type of house you buy; what they do, how old they are, if they have children…
Residential property is more likely to be a long-term investment than more traditional asset classes. Its success is measured over decades rather than years, and this permanence can give a sense of security. But remember, the type of property you buy, the location it is in and your target tenant must all match up.
Buying a property often requires a large loan and there are many regulations that you must follow when operating as a private landlord. You must ensure that the property is suitable and safe for renters, while still making strong returns.
While all of this is possible, it requires you to have your business head on when making the investment – let your tenants fall in love with the property instead.
For landlord guides and advice, remember to find the latest changes to the property market and landlord law on LandlordNews.co.uk.