Buy to let is an increasingly popular venture, especially in Cambridge, with its constant flow of students and professionals. It can prove a lucrative investment, but there are pitfalls to avoid and factors you should consider before taking the plunge.
Christopher Toynbee is owner and founder of CTP Property, a boutique property company specialising in residential property management. Last month, we focused on choosing the right property: now he takes us through what to do next – namely filling it with the right tenant.
“The best way to attract that ideal tenant is to provide quality accommodation: the days are gone now that you could get away with a poor quality house and still attract tenants, and quite rightly so,” says Chris, who also advises on avoiding long, unnecessary void periods.
“The best income isn’t always the highest; it’s the most consistent. So if you can get a tenant that’s going to be there for two or three years, then that’s usually the one to go for.”
‘The best income isn’t always the highest; it’s the most consistent’
What about students? In Cambridge they’re in plentiful supply, and while some landlords may shy away from this market, it can prove a worthwhile venture for those in the know.
“It can be more time intensive,” Chris admits. “In the first instance you’ll get larger groups looking round who’ll all have questions, and it’s often the first time they’ve rented somewhere so there’s a lot of explaining to do. Then you need to consider what happens if one of them leaves, and it’s good to have a good dialogue with the guarantors, who are often the parents.
“But I find my student tenants are some of the best tenants we have. They can be easier to deal with, and because you know when they’ll be leaving you can prepare and plan, which you can’t do with professionals, who will leave with a month’s notice. So there can be less of a void period between the tenancies.
“If a landlord is looking to maximise their investment in a property, then student tenancy is the way to go. We’re already signed up until the end of August 2015, and all you have is a one-week void between the tenancies which is enough time to get it cleaned and any issues fixed before the next lot move in.”
Because students aren’t terribly renowned for their neatness, it can be wise to include a weekly cleaner and gardener, as Chris explains.
“With student properties, we have all-inclusive rent (gas, water, electricity, unlimited Wi-Fi), and having a cleaner and gardener is probably more beneficial than with a professional couple who might take it on themselves. Also, that way, the landlord can guarantee that the property is kept in good condition, and be kept informed of any issues within the house that the tenants might have overlooked.”
One of the major decisions faced by new landlords is whether or not to have it managed or to go it alone. This is dependant largely on your own lifestyle, your other personal commitments, how close you live to the property and how hands-on you want to be. Are you happy to be called out to advise on leaky taps and sort out broken boilers? If not, it might be worth enlisting a professional to take care of the nitty-gritty.
Says Christopher: “If you get a good tenant, hopefully they won’t be calling up at all hours. But things do and will go wrong. If you do it yourself, you’ll have to respond quickly to issues and have good knowledge of the industry: things like having to provide 24 hours’ notice before going round and understanding HMOs if you’re letting to a group. So unless you’re confident with the legality of it all, I would recommend using a property manager to look after it.”
Chris comments: “Because we are landlords ourselves we feel that we’re in a good position to advise other landlords.”
For more advice, get in touch on 01223 226183.