How to buy a profitable investment property

From southend on sea investment propertiesthe moment you decide to invest in property in Southend-on-Sea, there is important research to be done before becoming a private landlord. Owning houses for rent in Southend and the surrounding areas is not always simple. There can be issues that will eliminate your returns. Martin Ransom, Office Manager at Southend Lettings agency Pace Plc offers some ideas about how to begin you search.

1. The area

The quality of the area in which you buy can influence both the types of tenants you attract and how often you might end up with an empty property. For example, if you buy in an area near a university, the chances are high that potential tenants will predominantly be students. This means empty properties during the summer on a fairly regular basis.

2. Schools

Your future tenants may have or be planning to have children. If so, they will try to find a home near a good school. Always check the quality of the schools in your chosen area because this can affect the value of your investment. If a nearby school has a poor OFSTED rating or a bad reputation, prices will be reflected in your property's rental value. Although you are also probably more concerned about regular rental payments at this stage, the overall value of your property is a consideration if you eventually plan to sell to fund your retirement.

3. Crime

No one wants to live next door to a hot spot for criminal activity. Go to the police or the public library and research current crime statistics for various areas. Look for information about vandalism, serious and petty crime and whether it is on the increase.

4. Amenities

Check the your chosen areas for retail parks, gyms, cinema and restaurant complexes, health centres, public transport links and all of the requirements regularly requested by tenants. Towns and cities, and sometimes even particular areas have websites and often promotional literature that will give you an idea of where the best mix of public amenities and private property can be found.

5. Planning permission and future developments

Local authority planning departments will hold information on any intended building work for the area. If there are new housing estates planned, business or retail parks, it is probably a growth area. However, new build housing could also provide competition for your potential tenants, so be aware of that possibility.

6. Amount of ‘For Sale’ boards

If there are plenty of properties for sale in a particular area, this could either be a sign of a normal seasonal property cycle or maybe an area that is in decline. Make sure you find out which it is before you buy. Also look at how many properties are ‘To let’ in the area. High vacancy rates can force landlords to lower rents in order to snap up tenants; conversely, the opposite can also apply, where few available rental properties can allow landlords to charge a premium price.

7. Rents

Rent is the bread and butter for your property investment, so you need to know the average rental fees being charged in the area. Speak with any of the property advisors at Pace, who will know the local market and can guide you on sensible rental values. If asking for the average amount is not enough to cover your mortgage payment and other expenses, you need to continue your search. Be sure to research the area well enough to gauge what might happen in the next five years. If you can afford the area now, but major improvements are in the pipeline, then what could be affordable now may considerably increase in price later.

8. Natural Disasters

The weather is hitting the headlines with increasing regularity and insurance is another essential expense you will have to subtract from your returns. If a property is in a flood plain additional insurance can be expensive and may diminish your rental income. Do you really want the hassle of flood damage and insurers to deal with?

9. Rent Insurance

If you are at risk of not being able to pay the mortgage on your property if the rent doesn’t come in then seriously consider taking out rent insurance to cover the rent if the tenant does not pay it. See further details here on our website: landlord's insurance.

The Bottom Line

Every county has desirable towns, every town has desirable areas and every area has desirable properties, but it takes a lot of groundwork and research to find all three. When you do find your ideal investment property, keep your expectations realistic. And, make sure your finances are in a healthy state. You may have to wait for the property to generate rent for a couple of months. Don’t forget to factor in times when you will have no rent coming in at the change of tenant or due to a bad tenant. It is also worth budgeting for a reputable local lettings agency in Southend to manage your property for you. This allows you to sit back and enjoy your returns without the hassle that comes with looking after tenants.


Martin Ransom is Office Manager at Pace Plc, an independent Southend on Sea Letting Agent.

With nearly 25 years experience in the property industry, Martin is well placed in his role as Branch Manager for Pace.

After joining the business in 2010 Martin took it upon himself to foster excellent customer service among the team and this continues to position Pace as a leader in its field today.


Pace Property Lettings & Management Ltd
   
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"I am a landlady with many properties and have dealt with Pace for about 10 years. Marcus is very friendly, honest, efficient and helpful and has made my letting experience extremely easy always finding me suitable tenants. I have nothing but praise for Marcus who has been with Pace many years.

Mary R

After renovating a block of 21 flats to place into our rental portfolio we instructed PACE and gave them two weeks to let all the units on a sole agency basis. They marketed the flats for a week and conducted a strict open house event on the following Sunday for 4 hours. Within this slot 15 flats were let with the remainder let the following week.

The Director of Runwood Homes

As a landlord with multiple HMO properties, I have employed the services of PACE for a number of years now as they ensure I have my required specification of tenant placed in all my rooms. I only let rooms to employed applicants and very much favour their opening hours as this attracts and accommodates the right people.

Johnathon Simons HMO Landlord

Sara is my dedicated property manager and has been for some time. I have always found Sara to be a very professional member of staff. Sara always keeps me informed and provides regular visit reports, which is important for any landlord. Sara deals with any problem that befalls her, contacting me if she needs to. Sara will discuss any problem and invariably come to a solution.

Raymond Durrant – multi property landlord

The staff are always friendly and helpful, my special thanks to Sara, we have built a very special rapport and I feel very comfortable phoning if I need anything. I feel very happy that I have one person to deal with all of my issues.

Evelin Jenkins - Tenant

We cannot stress how much we appreciate having a dedicated property manager for our properties. We live 350 miles away and also spend a great deal of the winter out of the country. To be able to phone our manager who understands our properties and how we operate is for us complete peace of mind.

Peter and Maureen Mason – Multi property landlords

I was extremely thankful I chose PACE to conduct the sale of my property and extremely grateful to Sue Mellor who worked very hard to ensure a smooth transaction. She was most knowledgeable and professional throughout, always reachable and approachable. She was able to answer all the questions I posed.

Yvonne White

I've recently purchased a property with the help of Pace. I found the staff extremely helpful and friendly. My first contact was Katie, she showed me around the property and liaised with the vendor. After, I dealt mostly with Sue Mellor. She was very knowledgeable and helpful. She kept me informed throughout the process and was the first to congratulate me on completion.

Roni Miller

I just thought I'd drop you a line about Adele Moore who is managing my flat. Adele is doing a great job and is a credit to Pace. She has done, and continues to do, exactly what she says she will do and as a customer that is exactly what I want. Adele doesn't take things at face value and investigates things when she needs to, again a thing that clients will prize.

Tony Mihill - Landlord

Thank you to the team at PACE for firstly providing excellent property management services over many years and secondly for helping me to sell my property recently.

All your hard work has been very much appreciated. Special mentions to Sara, Amy, Sue and Billy for their friendly and professional service!

Charlotte, (Property Management & Seller)