Speaking with a local estate agent before buying a property in Hammersmith, London W6, is vital, this is very pertinent for buy-to-let investors. Here are a few key questions that should be asked, they generally differ from the standard questions that a house hunter would think of. At Willmotts we are happy to help share our knowledge to ensure that investors have a full understanding before making an offer.
Is the property leasehold or freehold?
Willmotts recommend buy-to-let investors check whether the property is freehold or leasehold. As they should factor in any extra costs such as annual service charges and ground rents which could impact yield. Also, what is the size of the Sinking Fund in the building, which may be in place to cover for potential future works. Also check how long the lease is, the shorter the lease the greater the cost it is to extend it. If the lease is under 70 years most lenders will not give a buyer a mortgage.
Is the area in demand and has the property been let beforehand?
Investigate the rental history, has the property been rented before if so what is the demand like. Does the local area cater for students, young professionals or families? Is there a local university or hospital? If letting to professionals you should look to be close to transport links into commercial areas. Hammersmith has great transport links, restaurants & gyms. For families W6 has great local education facilities, state and independent schools. Connectivity and services in an area is important for future lets.
Will the property fall under the new Hammersmith and Fulham HMO laws?
From June 5th 2017 Hammersmith & Fulham will bring in new Private Landlord licensing that could affect the rental of your property. In some cases even a studio flat will need to be licensed if it is on a particular street. House of multiple occupancy laws are designed to safeguard tenants from illegal landlord practises. It is important to make sure you abide by this new code; there are specific criteria for the types and tenant and property. Willmotts have a depth of knowledge in this area and constantly keep our clients in the loop.
What is most important for you?
Stress free rental options, a good yield or capital growth? A buy-to-let purchaser of a five-bedroom property in Hammersmith could obtain a gross yield between 4% and 5%, but the hassle of finding several sharers, coping with the tenants politics and fall-outs, coupled with the wear and tear may put off some buyers. If maximising yield is not the main goal and capital growth is, the simplicity of letting the property and minimising costs may be what suits you. For example we have clients in Hammersmith and West London, who are just looking for the best yield that can be currently obtained from their investment, where a return above 3% would do.
Is your investment long term?
Potential market growth is often overlooked. Longer term if costs are covered and the yield of the property is not as important. Having the best and a happy tenant in your asset for as long as possible is key. Sit back hassle free and enjoy the natural market growth.
What is the energy efficiency like?
The Law is changing from April 2018, therefore be mindful of energy performance ratings. Properties which have a poor energy efficiency rating will be required to upgrade. Tenants’ demands rise yearly and a low cost energy-efficient property is more important than ever.
Are you thinking of buying and letting?
Speak to our residential team
020 8222 9958