The findings say key requirements include a hard-headed business assessment of the local housing market, an intimate understanding of the requirements of tenants and thorough research into the amenities of an area.
Location is key for astute buy-to-let landlords. Nearly three-quarters of buy-to-let properties are within 20 miles of the landlord's own home as this means that they can keep a good eye on their investments and can exploit their detailed local knowledge to make sure they are picking the areas most likely to provide them with a solid return.
First and foremost, landlords are looking for financial returns, looking for areas where prices are reasonable and likely to rise over the longer term and where rental demand and consequently yields are strong. Over half cited this factor as extremely or very important. But to be certain of good returns, landlords need to do their homework on an area. Good public transport links were rated by 57% as an extremely or very important factor influencing location choice.
Most tenants are not looking for a dream home in the country, but want mobility and convenience above all. Among the least important factors were proximity to schools. Many tenants do not have children so do not require schools. Landlords in their turn do not want to pay the premium prices property close to good schools commands.
The most popular type of rental accommodation were flats or maisonettes, with just under 70% making up part or all of respondents' portfolios. Again this reflects the fact that a large chunk of rental demand comes from would-be first-time buyers who are likely to be single or couple tenants without children.
Nicola Severn, marketing manager at Mortgage Trust, says: “There are a number of elements potential landlords need to consider when choosing a location and property type for their investment. Hands-on investors will need to be close to their buy-to-let properties but landlords need to consider key factors likely to affect the attractiveness of their property to tenants.
“This study reveals that today's investors are canny to the needs of their target tenants, principally young people who have not yet stepped on the property ladder, and are looking to invest in flats or maisonettes in areas with good transport links and access to local shops. Not only are these 'location influencers' likely to appeal to potential tenants but can also indicate up and coming areas with good rental yields and potential for capital growth.”