If you’ve decided to invest in a buy-to-let property for your children then you have some big decisions to make. You’ll be spending quite a lot of money, so you need to choose the right place. Mortgage rates are still fairly low, so if you’ve been putting these plans on the back-burner, it’s time to get moving.
Firstly, you need to work out the reasons for your investment. Parents often opt for a buy-to-let as their children need accommodation while they’re at university.
Your own halls of residence
The first thing you need to do is find out whether your child will want a house-share or a small flat to live alone in. Then, do they want central and in the middle of the action, or do they want a quieter place further out? It’s a good idea to spend some time in the town or city to get a feel for areas and for prices. If you’re planning to rent out the property after your child graduates, then you need to think about catering to students.
Letting to students is quite easy – they want basic, durable and clean furniture with a few kitchen appliances rather than high-quality items that cost a fortune to replace. If a property starts off clean and in good repair, it’s more likely to stay clean and in good repair.
Investing for the future
Other parents are investing in a nest-egg for their children and grandchildren. It’s easier to invest in a familiar area if you’re doing this and you can also approach it in a more business-like manner; think yields and appreciation. It might be an idea to buy somewhere out of the way, in an up-and-coming area of your city so that you see a decent amount of growth year-on-year and get a good yield on the rent.
You also have more flexibility with your tenants – you could rent to young professionals, families or groups of students. Families will need an area near to good schools and shops, while professionals and students will want to be near clubs, bars, and transport links.
Whatever you decide
Whichever type of property you go for, it has to be safe. It’ll need to come up with fire regulations and have all the gas and electricity certification. If you’re renting to groups, you’ll also need a Houses of Multiple Occupancy (HMO) licence.