Despite the recent tax changes and stamp duty rises, buy to let property in Hull is still an excellent investment, with the potential for excellent returns.
Hull is one of the UK’s property investment hotspots, and with good reason. Affordable prices, excellent returns on investment and a very buoyant rental market means there is some serious money to be made for both new and established property investors alike.
However – there are real risks involved. Choose the wrong property, and your investment dreams could quickly turn into a nightmare, as maintenance issues, void periods and lower than expected returns all eat into your investment.
Ensure you make the right decisions and choose the perfect investment property in Hull with help from a few top tips.
Work out your budget
Your budget will inform the kind of investment property you can purchase, and the areas you can afford to look in. Unless you have all the cash saved up, you’re going to need to take out a buy-to-let mortgage to finance your purchase.
Buy-to-let mortgages are a little different – most lenders will require a deposit of at least 25%. You will also need to prove that you can rent out the property for at least 125% of the cost of your mortgage.
Before purchasing a property, you’ll also need to think about the additional costs, like legal fees and stamp duty. For private investors, remember to factor in the extra 3% stamp duty you will have to pay on the purchase price.
Think about your target tenants
Before buying a property, it’s important to think about your target renters. When looking at a potential investment, consider who would like to live there. Different kinds of tenants all provide different opportunities and have different requirements.
The student market can be extremely profitable. Properties should be clean and comfortable, but won’t need to be done up to the same spec as if you were renting to young professionals. On the downside, you are likely face a high turnover of tenants and higher maintenance costs.
Young professionals tend to let clean, modern and furnished homes, whereas families often like to rent properties unfurnished, and like to have the freedom to decorate. Families often rent homes over the long term, which can minimise void periods and provide some stability.
Location, Location, Location
Choosing the right location is essential. This doesn’t come down to price – it means picking properties that are right for the area, in places where people want to live (and rent).
What makes an area attractive depends on the type of tenant you’re going for. Young professionals tend to want to live close to good transport links and local amenities. Access to good schools, parks and shops can make areas more attractive to families. Students want to live close to the university…
You’ll also need to ensure that the type of property you’re purchasing is right for your target tenants – a property may look fantastic, but if it isn’t right for the area, it won’t provide best value.
Ultimately, it comes down to choosing an area where you can afford the kind of property that the people who want to live in an area would choose to live in! Your local property agent will be able to provide you with advice on the right properties for each area.
Close to home or further afield?
Whilst the majority of investors choose to invest in property close to where they live – this may not provide the best returns.
Unless you are planning on being hands-on and managing the property yourself, it’s perfectly possible (and in many cases, preferable) to invest in buy-to-let property further afield.
For a management fee, a trusted local agent will be able to manage properties on your behalf, with minimum input. Choose the right property, and the benefits in terms of increased yields can far outstrip the costs of property management.
Looking for properties you can add value to can pay real dividends. If you’re prepared to do the work, it’s often possible to get great deals on property that you can add value either through redecoration, refurbishment or extension.
Adding value to your rental property can deliver lots of benefits – it won’t just give you a bit of a safety net in terms of equity (which you can use later to grow your portfolio), it can also help to boost rental yields, maximising the returns on your investment.
Before you buy, it’s important to know the market. Every area has a cap in terms of both property values and rents – and it’s important that you don’t invest more in your property than the value your improvements will add. A local agent will be able to provide you with realistic advice on how much value you can add, and whether it’s worth doing.
New or old?
Both new and old houses have their advantages. For hands-on investors, a new property is likely to come with fewer maintenance issues (and associated costs), and can be more attractive to potential tenants.
However, older properties can provide opportunities to add value – through renovation, extension or redecoration, boosting potential returns.
Use your buying power
Often with property investment, you make your money when you buy. Every pound you save now will help to improve your returns later.
As a property investor, you are in the driving seat when it comes to the negotiations. Unlike other buyers, you won’t be in a chain – so you represent a less risky option to the seller. Use this leverage to your advantage when it comes to negotiating the price.
Do your research on the seller, the marketplace and the property in question. Look for motivated sellers and properties that have been on the market a while for value for money. Other property investors looking to realise their capital gains are often looking for a quick sale.
Hull Buy to Let Property Advice from CJ Property
At CJ Property, our team are property management experts – and we’re here to help you make the right decisions when it comes to investing in buy to let property across Hull and East Yorkshire.
Our local team of property professionals has vast knowledge and unrivalled experience in the local market, and we can help you at every step of your investment journey – from finding the right, desirable properties in the right areas, to looking after your portfolio and managing it on your behalf.
Ready to invest? Start your journey today with a free, no obligation consultation with CJ Property – the Hull buy to let investment specialists. Call 01482 645270 today for further information.