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.