The key here is do your homework well.
Firstly the sums need to add up, more on this in another blog, but the aim is to identify properties with a good level of rental demand, that will be easy to maintain and manage and ideally have the potential for decent levels of equity growth.
When considering different areas, look into levels of demand and the rents being charged, speak to local letting agents, get their opinions, look at proximity to amenities and transport links. Go and look at the area itself, does it appear safe, clean, cared for, identify any potential anti-social behaviour issues such as Pubs, take away’s etc. Visit the area on different days and times to get a feel for this.
If looking at flats or apartments how do other properties in the building appear?, what sort of people seem to be living there. Find out if there is a factor for the building and what sort of costs there are. Be very wary of buildings were there is no factor as getting individual property owners to contribute their share of maintenance costs could prove very difficult, and remember there are legal obligations on a Landlord to maintain a property to certain standard, that owner/occupiers will not necessarily need to abide by.
When looking at individual properties themselves consider the following;
How much remedial work may be required and what this will cost to make it compliant with current regulations in the private rented sector.
Check out how energy efficient the property is. The Scottish Executive is currently reviewing energy efficiency standards in the private rented sector and is likely to do something similar to new rules in England & Wales where from the 1st April 2018 properties with a band rating below E will no longer meet the criteria for property in the private sector.
Is the property in good decorative order with modern kitchen and bathroom, or are you quite prepared to do this work having bought it. Good tenants have expectations just like everyone else. Ask yourself this question “would I like to live here?”. If the answer is no, then why do you think it will appeal to sort of tenants you would like to see living in it.
When considering the issues of equity growth and “sale-ability” speak to local estate agents and try get a feel for how much demand there is for properties of this type, how often they come on the market?, how quickly do they sell?, are prices rising?.