Buying vacant properties and promptly turning them into profitable rentals can be exciting and rewarding for savvy investors and leasing vacant properties. However, it's crucial to recognise that issues may lurk beneath the surface, even if they are not immediately apparent. In this blog, we will explore why investors should anticipate potential challenges when purchasing and letting out vacant properties right away.
By understanding and preparing for these issues, investors can ensure a smoother and more successful rental experience.
Vacant properties offer unique advantages to investors, including:
- Lower purchase prices. Vacant properties often come with lower price tags, presenting an opportunity for investors to acquire assets at a favourable cost.
- Flexibility for renovations. Purchasing a vacant property allows investors to customise and renovate the space according to their rental strategy and target market.
- Rental income. Vacant properties allow you to place the tenant of your choosing, you'll move them in with a thorough reference and affordability check, and you won't be risking inheriting tenants in arrears.
While a vacant property may appear visually appealing, it's essential for investors to consider potential underlying problems that may not be immediately noticeable:
- Structural issues. An inspection might reveal structural concerns such as foundation problems, plumbing leaks, or electrical issues. Anticipating these issues helps investors plan for necessary repairs or renovations.
- Pest problems. Vacant properties can attract pests like rodents or insects, which may have gone unnoticed. Engaging pest control services beforehand can mitigate future complications.
- Outdated or faulty systems. Heating or water systems might be outdated or require repairs. Anticipating these issues helps investors budget for necessary upgrades.
- Legal compliance. Investors should familiarise themselves with regulations and legislation, ensuring the property meets EICR*, GSC*, EPC*, and rental standards before leasing it out.
EICR: Electrical Installation Condition Report | GSC: Gas Safety Certificate | EPC: Energy Performance Certificate
Investors and landlords can minimise surprises by undertaking comprehensive due diligence before finalising the purchase:
- Professional inspections. Hire qualified inspectors to assess the property thoroughly, including structural integrity, systems, and potential hidden issues.
- Extensive research. Understand local market conditions, rental demand, and potential tenant profiles to gauge the property's suitability for immediate renting.
- Financial analysis. Consider the costs of repairs, renovations, and any potential vacancies when calculating the property's investment potential.
Investors can protect their investments and maximise returns by implementing the following strategies:
- Building a network of reliable contractors. Establish relationships with trustworthy contractors, ensuring quick access to professionals who can address any issues that arise.
- Budgeting for repairs and maintenance. Set aside a contingency fund to cover unexpected expenses that may arise during the initial stages of renting out the property.
- Developing strong tenant screening processes. Implement rigorous tenant screening procedures to reduce the risk of problematic tenants and potential property damage.
Do those strategies sound like a lot of extra work? Worry not, our Full Management service takes those worries off of your plate and onto ours. Our expert team have years of experience in valuing, inspecting and conducting due diligence on properties to ensure they are fit for renting and compliant prior to your tenant moving in.
Don't have the time to build a network of trusted traders? We've got that covered too. Our fully-skilled in-house Works Team are on hand for all of your maintenance requirements. For specialist tasks such as gas, electrical and plumbing, we have a network of our own trusted contractors that have been providing their services for our clients for years.
Buying vacant properties and swiftly turning them into successful rentals is an appealing investment strategy. However, investors must anticipate potential issues that may not be visually obvious. By conducting thorough due diligence, preparing for hidden problems, and implementing proactive risk mitigation measures, investors can maximise their chances of a smooth and profitable rental experience.
Remember, foresight and preparation are the keys to unlocking the hidden potential of vacant properties.
If you have any questions about our management services, give us a call at 01482 562 562 to speak with our Lettings Manager, Jake. Or, if you have any questions about property maintenance and refurbishments, talk to our Works Manager, Jack 📞