Where and what to buy
Essentially, there are two things you will want to achieve with a rental property: capital gain and yield. It depends on your own circumstances and choice, which is the more important.
If you are looking for high yield then ex-local authority properties are usually a good bet - but they usually offer poor capital gains. If it's capital gain rather than yield then generally you need to buy high quality property in up-market areas.
There's a strange guide I always follow, and that is the more unpleasant the area the higher the yield - though it doesn't always apply!
Remember also that in order to get tenants you need to ensure that your rental property is well situated for transport links and shopping/entertainment facilities.
It's actually a good idea to buy locally if that is feasible as it will enable you to let and service the property yourself if you wish.
What type of property?
If you are able to easily manage the property your self then a freehold 2/3 bed house can be a good idea because you will not have to pay service charges that will probably be out of your control. However, if you cannot easily manage the property for any reason then a flat with a management company is a good solution. But always check carefully the length of the remaining lease and the service charges etc.
Buying at auctions
The best way to buy a property at the lowest possible price can be to buy at auction. The drawbacks are that you must have the cash available,
remember that 10% is required on the day and the balance after 28 days from the auction. Also, you should get the legal pack carefully checked out and a basic survey done. If you fail to secure the property then of course the costs of the legal and survey work will be wasted.
The two golden rules when making alterations, refurbishing or simply decorating property in order to rent it, are as follows:
1) Know your market...
If you're looking for young professionals as tenants you will want to ensure that the decor is both neutral but at the same time stylish. As far as furnishing it's best to be flexible.
If your market is students then it's best to provide basic furnishing such as beds, a sofa, a coffee table and perhaps white goods.
2) Don't get too personal...
Remember that an investment flat or house is not where YOU live. Do not overspend, obtaining wonderful furnishings that you personally like, because it will probably all be wasted! Just decorate and furnish up to the level that your market expects.
Use a letting agent or do it yourself?
If you are local to your investment property and you are confident to show the property yourself, then I would strongly advise doing it yourself. Use an online agent to put your ad on the main portals like Rightmove and always take out Rent Guarantee & Legal Expenses insurance.
This is because there is a slightly increased risk of dodgy tenants seeking out landlords advertising direct. Consequently it is VITAL to reference as thoroughly as letting agents do.
However, if you're not local to the property then you will need to use an agent. Do ensure they are members of ARLA and I would definitely avoid 'Full Service' agreements and go for Let Only at about 7% - 8% of the annual rent.
I have produced a Kindle Buy To Let guide
myself, UPDATED for 2021,
aimed specifically at first-time landlords, available as a download from Amazon.