Investing in Rental Property

So, you’re thinking of Investing in Property? When it comes to building a retirement nest egg for the future, property is still regarded as one of the safest long-term investments, but no investment of any sort is totally risk-free, and that is why there are a few things to consider before jumping into property investments and lettings.  

At Now Rooms Liverpool, we can help guide you through the world of investment properties using the knowledge and experience we have gained from being a strong presence in the Liverpool rental market for a number of years. During this time, we have helped hundreds of landlords and investors to start, expand and manage their portfolio in Liverpool, providing expert tips on all things lettings & Property Management and giving investors access to fantastic sales opportunities within our portfolio. Below are some useful points to consider.

When purchasing a property for investment, do research on which areas of the city/region have lower house prices and higher rents. This could potentially be somewhere near a university, retail parks or city centre. However, this is not always the case. For shared properties in particular, students and young professionals may prefer to stay a little further out the city and seek accommodation close to shops and transport links, where the rental figures may be slightly lower than city centre apartments, but they can still easily travel to work/university and of course, socialising and nightlife, which Liverpool is certainly renowned for!

Traditional savings investments do not always give very strong returns. Property investment, particularly HMOs, is often seen as an attractive alternative, with the potential to earn around 13% gross yield, in some cases. If you want to invest, but are concerned with potential problems managing your property, Now Rooms Liverpool offers an array of services that will allow you to reap benefits from your investment without having to do all of the hard work on a daily basis. With the right agents, your investment in a property can be hands-off, and it’s an asset that can be liquidated if your circumstances change at some point in the future – you own the property and can sell this when you wish (we can also help with property sales!).

Once you’ve established where you are looking to invest, choosing the right property is another very important key to success. If you are wanting to rent an HMO, do you want to purchase a property that is licensed, tenanted and functioning as a HMO already, or do you want to purchase a property to convert? Both have their advantages and disadvantages. A few things to consider here would be whether the area you are looking at is within any local council restrictions, such as ‘Article 4’. This is a restriction placed within various boroughs of Liverpool City region, limiting the creation & licensing of new HMOs in already saturated areas and meaning it can potentially be more difficult to obtain a licence on a newly converted property. If you are looking at a property sale opportunity within Liverpool, it is always a good idea to check this first before investing too much of your time and efforts. You can find more information about this here, on Liverpool City Council website:

https://liverpool.gov.uk/planning-and-building-control/planning-permission/article-4-directions/

If you purchase an HMO that is already 100% occupied by tenants, this will enable you to start earning rental income right away. In this scenario, you would need to obtain tenancy info, licence details and safety certificates from the previous owner/managing agent, serve notice informing tenants of the change of ownership, ensure you transfer any deposits into a secure online government registered scheme, and ensure the property is compliant with all government legislation and health and safety regulations. You will then be responsible for handling any tenant issues, collecting rent each month, finding new tenants if they decide to move out, renewing certificates, fixing maintenance and so on. There’s a lot to do!

Every property, large or small will need management, whether it is finding tenants, keeping on top of ad-hoc maintenance issues or ensuring the bins are being collected - there are always things to do. If you live locally and have the time and skills, you may wish to manage the property yourself. However, for most investors this is the last thing they wish to be involved with. A professional property management company such as Now Rooms Liverpool will do all of this for you and will look after the sourcing of tenants as well as collecting income and sorting out maintenance issues as quickly and efficiently as possible – taking away the daily hassles involved in managing property and tenants, and leaving you to receive maximum rental income and reap the rewards of your investment!