Essential Guides & Advice Buy The Right House For Development

Date Published:

02/06/2009

Whether you plan to sell on or rent out, doing your research first is vital to making or breaking the project.

Research The Area

The best way to find out about an area is to go and visit it. Make a list of the area’s plus and minus points. Find out what will appeal to a potential buyer or tenant. The following are all important to know:

• What’s the local education like? Good schools are a big draw. A top state school, according to Haart estate agents, can add 11% to the value of a house. So watch out for new schools opening or for those that have recently improved. The Department for Education and Skills will have details of new schools, while Ofsted inspection reports shows a school’s performance.

• How good are the transport links? A survey by Haart estate agents put transport links at the top of the list of improvements that can boost an area. Listen out for news of new rail links and bus route changes and check the Highway Agency website for proposals to change local road systems.

• What amenities are on offer? Desirable properties will be near to shops, restaurants, public parks, sports facilities and leisure facilities. The Virgin One Cappuccino Test report revealed the three signs people look for on a high street are trendy bars, high street shops and a bookshop chain.

Up My Street lists information on property prices and useful neighbourhood profiles on average earnings, crime statistics and employment levels. It also has information on estate agents and letting agents.

Who Will You Sell Or Rent To?

Recognising who you are developing for is essential: couples, single people, students, retired people and families will all have very different needs. Put yourself in the shoes of potential buyers or tenants and think about what they may need from a home. A growing family will want a spacious home in a good school catchment with a garden. Whereas a professional couple may not have time to look after a garden but do want to be within a short commute of their work and be within walking distance of restaurants and shops. Always keep in the forefront of your mind that you are not developing for you.

Find out from a local letting agent what percentage of the purchase price you can expect to receive as rent. Rents always differ between areas, and are higher for furnished properties. They can fall as well as rise. You have to check out the rental market thoroughly and not make any assumptions. You do have to be in the right place at the right time to make a big profit from rental income. Of course, you do still have the property as an asset – it’s just not a particularly liquid asset that can be sold in a hurry.

Can You Make Money From Student Accommodation?

Unlike much of the buy-to-let property market over recent years, student rental levels have been growing consistently, fuelled by an increasing student population, which has led to demand for suitable living accommodation outstripping supply. According to Savills, student rents have increased 31% in the last two years alone, far outstripping current rental growth in much of the market. As a result, student property has emerged as highly lucrative investment offering a strong rental income.

Stuart Law, chief executive at Assetz, says: 'Student property has such a high income that you can often repay a mortgage within 20 years, making it one of the most lucrative investment opportunities in the current market.' With average student rent at £56.30 a week, rising to £84 in Cambridge and £102 in London, according to Accommodation For Students, it can be a wise investment, providing you choose the property and area carefully.

More On Finding The Right Property

Phil & Kirstie On Finding An Area On The Up
House Price Crash: How To Bag A Bargain
Property Types To Beat The Crash

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