Did you consider these 3 things when looking at a property investment?

Cambridge is booming and housing is in demand but before you take the plunge into purchasing a rental property there are 3 areas that are often cost that are not considered.  

Management fees -  This is typically a percentage of the advertised rental amount. Most agencies charge between 10-15% depending on the level of service that they offer.

The agent will promote your property, record an inventory, show tenants around the property, do a background check and draw up the tenancy agreement. Once the tenancy is active they collect the rent, chase any arrears that are owed, plus be the first point of contact for the tenant should there be any problems with the property.

Maintenance fees - Keeping your property up to date is an ongoing task but something that needs to be kept on top of. After all, it’s quite often that a small cheap task can quickly escalate into a large expensive task if left alone. Budgeting for this you should allow anything between 10-15% depending on the condition of the building when it is rented.  

The level of maintenance required will vary depending on what has been outlined in the tenancy agreement, but by law, you’ll be required to keep the property in good repair. The major areas that should be of focus are the supply of gas and electricity, but could also include the exterior of the building including the roof, floor slabs, walls, windows and doors.  

Void periods - When you have a rental property it needs to be considered a business and not your home that is just rented out. This will help you realise that making the most of it is important, and makes you aware of the numbers involved with the investment. The one thing you want to avoid is a void period. This is when the house does not have a tenant and as a result, is not bringing in a monthly income. Which could result in missing mortgage payments on the property.

To ensure you limit this to the best of your ability, start by being smart with your rental figure. The highest figure isn’t always the best as it might take longer to find tenants which again is costing you money. Renting a property is a long-term game and so you need to consider what will give you the best security. Market your property well and make sure it’s being pushed. Agents can have hundreds of properties on their books and yours can easily be left at the bottom of a pile. So do that little extra to help yourself. First impressions count when it comes to renting a property. A clean, fresh and bright house will always rent out quicker than one that is not.

When you come to looking at a rental property, make sure you consider all the aspects of owning an investment property and not just the items that are pushed in front of you.≠