If you are looking to invest in property, one of the most important things that you will need to consider is which types of properties will make the best rental investments. Let’s take a look at the different types of accommodation and the advantages that they offer in the rental market.
In the city or country?
When you are choosing an investment property the focus should be on what the market demand is, rather than where you want to live. With any investment property you should look at what the market wants and generally there is more demand for properties in the city. This is where the majority of employment is, so you will find it easier to rent a home. Of course, there is some demand for country properties but it is important to consider what will be the best investment for you.
Should you buy a flat or a house?
When you buy a flat you will have to pay management charges, which can add up to more than £1000 per year. Flats are very in demand with tenants, but there are many available and competition is likely to be tough.
A flat will tend to attract singles or young couples, while houses tend to be rented by families, who will need parking and more space. Do your research to find out the demographic of the area and which group is searching for accommodation.
Should you rent a large house or a small one?
A large house will have the advantage of having larger rent, but it will typically take longer to rent out than a smaller property. Smaller homes can bring in better income and are in higher demand, so they will be easier to rent out.
Multiple occupancy or single?
When you are renting out multiple rooms of the same house, keep in mind that all of your tenants will not necessarily start and finish at the same time. This is a good thing because it means that you will likely always have someone renting in the home. However, it also means that it is important to keep the property well maintained – including the hallways, kitchen and bathrooms.
You will likely earn a higher income if you rent out the property in this way, but you will need to do your research when it comes to fire doors, emergency light systems and permission from the local council.
Old or new?
Older properties usually have a larger plot size, but they will come with more maintenance issues. New properties will be smaller but they tend to attract renters more quickly.