The UK buy to let market has been very strong over the last few years with more people now seeing property investment as an alternative to traditional pension schemes. There are many different areas to look at in the buy to let market including professionals, students, holiday lets to name but a few. However, what are the best tenant markets and how do you ensure you receive your money?
Local knowledge
There is no point reinventing the wheel when the wheel has already been created and you can just copy it. Check out exactly which types of property are more popular in the area, which ones demand the highest rent and which ones offer the longest income streams. You will need to take into account the value of property in the region against the rental income and in some circumstances it may well be more beneficial to move slightly away from the “property hotspots” to guarantee greater value for money.
This is also the point where it would be very helpful to build up relations with local estate agents and rental agents so you can receive feedback and comments accordingly. While some of this feedback may be slightly biased in favour of a “growing market” it does offer a good foundation on which to base your own research.
Securing your income
Whether you are looking to carry out the viewings yourself or perhaps you have a third party looking after the property you will need to be careful about securing your income. Many people work on a “gut instinct” feeling when taking on a new tenant but there are obvious flaws in taking people at face value. If you treat every tenant the same and ask for some form of security such as a guarantor then if the worst comes to the worst you will still be paid.
It also makes sense to build up a relationship with your tenants so that they can approach you with any issues they may have and you can take these into consideration. There will likely be times when some tenants are struggling to raise their rent in the short term but their long-term situation is solid. If you have security in the shape of some kind of guarantor then you can afford to be a little more obliging although you still need to be careful.
Conclusion
The best tenant markets in the UK will vary from city to city, from town to town, etc and you simply need to do your local research and adapt your property investments accordingly. Securing your income in the longer term by requesting tenants put in place some form of security such as a guarantor will keep everything above board and let all parties know where they stand. There may be times when you have to be flexible in the short term if unexpected issues arise but as long as you have some kind of security then your income will be guaranteed. As and when you do experience difficult tenants you must ensure that you play everything by the book, by the contract you both signed and ensure there is no potential for legal recourse.