Landlord Avice
CategoriesInvestor Advice

What Prospective Landlords Should Look For in Property

With over four million families now occupying private rental homes in the UK, many investors are turning their hands to property.

However, finding the perfect investment home in such a vast, fast-moving market can present a significant challenge for new landlords. In this article, we will break down the crucial elements of the perfect buy-to-let home, giving you a complete guide to the key features every landlord should look for in a rental property.

Why Choose Property?

The rental market landscape has changed dramatically over the last decade, becoming increasingly more difficult for young professionals to take their first step on the ladder. So, many tenants are willing to pay a premium for high-quality property, meaning this physical asset can provide landlords with a robust annual profit.

Additionally, unlike stocks, shares or cryptocurrency, property allows investors to be as hands-on or hands-off as they wish. For example, some investors enjoy the process of being the first point of contact for their tenants, whereas others choose to appoint lettings agents to oversee the day to day running of the home.

In summary, property is flexible and lucrative, providing a stable and robust income for those willing to invest their time, knowledge and finances.

The Differences With Buy-To-Let

The process of purchasing a buy-to-love home is worlds away from finding a property for your family to enjoy. When buying your own home, you likely have a long list of non-negotiables to ensure you secure a property that works for your individual needs.

However, when searching for your first buy-to-let, your aim should always be to appeal to the broadest possible market. For example, excellent transport links may not be a priority for your multi-vehicle family, but they are integral to the daily commute for others. Conversely, a large garden may be essential for your personal circumstances but would perhaps be too much for many to maintain.

Contemplate Your Ideal Tenant

Consider the dynamic that you are hoping to appeal to.

A three-bed semi-detached property is likely to attract families looking for a home with longevity. Priorities will include proximity to local schools as well as excellent transport links. Outdoor space and off-street parking are also factors that will help to elevate the rental yield and encourage tenants to renew their contracts.

Whereas, one-bed flats are likely to attract young professionals, or even students who would prefer a little more privacy than the standard house share can offer. City centre locations appeal far more to these tenants, who like to have amenities right on their doorsteps.

Proximity to green spaces and supermarkets will always increase the desirability of your rental property, regardless of your target market. Moreover, the carbon footprint of a home is becoming an increasingly important factor for many tenants. An environmentally friendly home will help reduce monthly utility bills and the damage to the environment, which is crucial for many searching for their ideal rental.

Selecting the Perfect City

Choosing the ideal city for your first buy-to-let will ultimately rest on two factors: your long term goals and your budget.

Those who have a large initial investment pot may opt for a one or two-bedroom flat in London. The rental yields in the capital are not as high as in many other cities due to the inflated purchase cost. However, the growth throughout ownership can be truly astronomical. Those opting for property with a vision to sell before retirement would be wise to focus their search around London.

Conversely, those with a more modest investment pot, focusing on supplementing their monthly income, would be wise to consider a northern city such as Manchester or Liverpool. The lower cost of housing means you will be afforded more choice and flexibility, and the annual rental yields are often much more robust.

Focusing on cities that are undergoing significant regeneration is an excellent idea. New businesses, educational establishments and young professions will be eager to get a taste of what the area has to offer.

For many years, landlords believed they needed to be close to their rental properties to guarantee success. However, the considerable growth in quality investment companies and lettings agents means investing further afield is now an extremely straightforward process.

Off Plan Homes for High Rental Yields

Off-plan property investment is the most stress-free strategy.

It involves purchasing a home before its completion, removing the prospect of wasted property viewings and stressful bidding wars. In return for your early security, developers offer significant discounts, and investors can often negotiate extras such as furniture packages and legal fee contributions.

Due to the robust market in the UK and the steady growth of house prices, the property will have increased in value before you have even welcomed tenants inside. So, off-plan homes are the ideal solution for landlords who are prioritising both capital appreciation and rental yield.

Getting The Home Ready For Tenants

It’s no surprise that most rental properties are painted in neutral tones and fitted with wooden flooring or plain carpets. This not only keeps the property bright and fresh but enables it to appeal to the broadest range of tenants.

All fixtures and fittings should be in excellent condition, with electric appliances safety tested. Taking care of the property before the tenancy commencement sets the right tone for the incoming occupants.

Prior to tenants moving in, you should take an inventory of the property, noting any defects present. Then, give the occupants the chance to view and sign this document, eliminating many disputes regarding property damage at the end of the tenancy.

Offering an element of flexibility allows you, as the landlord, to increase the monthly rental charge. This might include allowing tenants to redecorate or bring pets into the home. This will not only boost the annual yields but encourages long and happy tenancies.

The Benefits of Working With Professionals

Whatever stage of your property journey you are at, working with professionals will lead to the smoothest buy-to-let journey.

A dedicated property investment company will unlock a plethora of new off-plan properties not readily available to the general public. This routinely saves investors a staggering amount of time, stress and money.

Moreover, an effective lettings management team can deal with every aspect of your tenancy and generally work on a bespoke basis to meet your specific needs. These services range from sourcing, vetting and moving in your tenants, to collecting rent and dealing with any maintenance issues.

Property Investment Experts

This article was written by the team at Track Capital, who are experts in matching investors with their ideal properties. We work with individuals at all levels, from those searching for their first investment to those building an empire.

Check out our property news round-ups or contact our team for a no-obligation chat today.

Why Invest in Dubai
CategoriesInvestor Advice Location Guides

Why Invest in Dubai

Every investor should focus on diversifying their portfolio.

A diverse portfolio can be achieved in various ways, but combining a variation of property types in different locations will help secure your assets and protect you against market fluctuations.

The Dubai property market is designed to attract overseas investors. It offers bright, vibrant and varied neighbourhoods, favourable tax incentives, and even the opportunity for investors to become residents.

The implications surrounding Brexit have made European investing slightly more tricky for the UK investor, meaning many individuals are turning their attention to the middle east. Here’s a deep dive into why Dubai is an excellent property option for the UK investor.

The Facts and Figures

As you may be aware, the United Arab Emirates comprises seven emirates, covering 83,600 square kilometres and housing just under 10 million people from all around the globe. Dubai City is the capital of the Emirate of Dubai, which is one of the wealthiest of the seven mentioned.

3.3 million people call Dubai city their home, with the opulent living conditions attracting some of the world’s richest. The mixture of ethnicities, religions and cultures has created an exciting melting pot where everyone feels at home and expects to find a property to match their desires and budget.

The Dubai Dream

In 2019, before the coronavirus pandemic, Dubai welcomed 16.7 million tourists. Attractions such as the Burj Khalifa and the three incredible artificial palm islands draw visitors from far and wide.

Those with deep pockets enjoy indulging their lavish lifestyle here, but the city is popular with families from all walks of life. As a result, many businesses have built bases in Dubai, bringing with them eager staff looking to secure long term rental contracts.

Diversification Opportunities

The diversification opportunities in Dubai are tremendous.

First and most obviously, the option to purchase long term residential lets. UK investors tend to opt for the more lucrative, off-plan apartments, which can be handled in a completely ‘hands-off’ fashion and range from small studios to extravagant four-bedroomed spaces fit for a large family.

However, short term rentals are also extremely popular in Dubai. Many people travel to the city for work and prefer to opt for something a little more homely than a hotel, presenting the opportunity for you to rent your property for three to six months at a time. Although this requires a little more administration, the payoff can be astounding.

Finally, for those looking to break into the commercial property sector, the options in the UAE are massive. Having a base in Dubai is the stamp of approval for all modern businesses – from banks to software companies to boutique clothing stores. In addition, companies tend to take rental leases for much longer than the average residential tenant, meaning once the contract is signed, your investment will look after itself.

Residency Visas for Property Owners

Many UK residents diversify their portfolios in Dubai due to the lucrative opportunities and the option to become a resident of the United Arab Emirates. Investors become eligible to apply for a 3, 5 or 10-year visa depending on the value of the property they invest in.

Notably, these visa options are only available for those purchasing property in an individual capacity. Purchasing as a corporation does not present the same visa opportunities.

Favourable Tax Conditions

All UK property investors will be familiar with income tax, capital gains tax, inheritance tax and stamp duty land tax. These four crucial payments will ultimately affect how each investor handles their portfolio and at which point they decide to liquidise. These taxes are non-existent in Dubai, where a 4% one-time property tax is instead payable upon purchase. Incredibly, this is split evenly between buyer and seller, meaning as an investor, you will only be subject to a 2% tax upon purchase.

It should be noted that there may be one-off and ongoing fees associated with purchasing in some gated developments. Your dedicated property investment company will partner you with any relevant legal assistance you require during this period.

Choosing the Perfect Dubai Location

Don’t be fooled into thinking that every Dubai investment is equal. Dubai covers a whopping 4114 square kilometres, meaning it has an area to suit every taste and family dynamic. Here are three of the most popular spots in Dubai for both ex-pat investors and local property lovers.

Dubai Marina

Dubai Marina has long since been considered the most exciting area for Dubai real estate investment. The area combines an eclectic mix of residential properties, luxury hotels, buzzing retail spaces and world-beating restaurants.

The marina is a fashionable vacation location, offering the vibrancy individuals expect from a Dubai holiday, alongside easy access to the miles of golden sands. With incredibly high demand and an average residential sale price of 1,100,000AED (£220,000), the marina offers lucrative rental yields for those with modest budgets dreaming of a second home in the United Arab Emirates.

Downtown Dubai

Many consider downtown Dubai to be the epicentre of the city. The area is packed with incredible hotels, fine dining restaurants and some of the best schools in the world. As a result, most tenants looking for a home in Dubai will consider this area.

Those living in downtown Dubai have the Burj Khalifa and the Dubai Mall on their doorstep and the incredible Jumeirah beach just a ten-minute drive away. The average sale price in downtown Dubai is 1,230,992 AED (£246,000), with average gross yields of 5.8%.

Barsha Heights

Situated close to the magnificent palm, Barsha Heights (formerly known as Tecom) is fast becoming one of the most sought-after locations in Dubai. Barsha Heights succeeds in elegantly blending residential and commercial premises, building a tight community of business owners, ex-pats, and locals.

Barsha Heights offers a lucrative option for UK investors, with rental yields of 6.5% available and an average property price of 693,121 AED (£138,000).  This unique location presents an excellent opportunity for those with a passion for commercial property. Many businesses are eager to make their stamp in Dubai, willing to pay premium rental prices for unique locations.

Facilities to Boost Your Rental Yield

Luxury is the first word that springs to mind when most consider Dubai. The area exudes elegance, sophistication, and class. Meaning, residents expect a high calibre of rental property, and they are willing to pay a premium for it.

Aside from excellent location, tenants are searching for a range of facilities to enable them to live the life they have become accustomed to. Anyone lucky enough to visit Dubai will be well aware of the importance of secure parking. Dubai is a complex city to navigate, the vast spans of land and blazing sun make walking difficult, meaning a car is necessary for almost every resident. Secure underground parking will elevate your property, appealing to the broadest range of tenants.

Unlike many apartment blocks in the UK, Dubai homes are regularly filled with state of the art gyms, hipster coffee shops, and boutique restaurants. So naturally, residents are willing to pay a premium for this accessibility. Although the asking price for a property may be significantly higher, you will be sure to reap the rewards in the annual rental yield.

Dubai Investment Recap

  • Dubai is a varied and exciting city, but all investments should not be considered equal. The most popular locations include the Dubai Marina and Downtown Dubai, which both appeal to young professionals.
  • The city presents an excellent opportunity for UK investors to diversify their income, building a robust portfolio that is strong against fluctuating markets.
  • There are many tax incentives to purchasing a home in Dubai, and investors may even be presented with the opportunity to become a resident in the United Arab Emirates.
  • Tenants in the city have incredibly high expectations from their rental property. Therefore, opting for a home with amenities such as secure parking and quality fixtures and fittings will help attract genuine tenants with longevity.
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