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28th May 2024|News|

What To Look For In An Investment Property

If you’re hoping to get the most out of your property investment, it is important to know exactly what to look for in an investment property. We’ve narrowed down the three features you ought to pay close attention to when it comes to purchasing your next investment property – green features, local regeneration and an enviable location.

A Need For Green Features

As the UK moves towards achieving Net Zero emissions, the real estate industry desperately needs to adapt. With UK residences contributing to 26% of total carbon emissions, it is vital for the sector to prepare for a Net Zero future. The drive towards green initiatives isn’t solely propelled by developers; research conducted by Natwest and S&P Global indicates a rapid increase in green sentiment among residents. A staggering 75% of renters now express a desire for their landlords to implement eco-friendly measures in their rental properties.

The appeal of green properties to renters stems from two primary factors: their energy-saving features, which translate to reduced gas and electricity costs, and the growing inclination towards environmental sustainability. Green sentiment is consistently on the rise across the population, with Google Insights revealing that climate change and environmental concerns rank only behind healthcare in terms of public priorities. So, when wondering what to look for in your next property investment, pay heed to units equipped with smart features like heat pumps, solar panels, or intelligent thermostats to attract the ideal tenant.

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Local Regeneration

In addition to property quality and green features, local regeneration plays a pivotal role in long-term capital growth. Investing in or near areas that are undergoing local revitalisation is essential when it comes to smart investing. Beyond merely refurbishing structures and modernising amenities, local regeneration involves community investment and the creation of new opportunities for residents and businesses alike. This directly impacts the rental market by making regions receiving investment even more desirable to tenants.

This trend bodes well for investors interested in neighborhoods such as Digbeth, Aston, and Duddeston, where regeneration is abundant and property values—and consequently, rental incomes—are poised to soar. Furthermore, areas undergoing substantial regeneration typically exhibit higher compound annual growth rates. A study by CBRE underscores this, revealing that property transactions within a 10-minute walk of regeneration zones in London boroughs commanded an average annual premium of 2.2%, highlighting the tangible impact of regeneration on property values and rental yields.

A prime illustration of this phenomenon is evident in Birmingham, particularly around the forthcoming Curzon Street HS2 station. Forecasts suggest that properties within walking distance of this national transport hub could witness value appreciation of up to 60%, demonstrating just how vital local amenities are.

Search For An Enviable Location

When it comes to what to look for in an investment property, location reigns supreme. It dictates demand, influences yield, and shapes the desirability of all buy-to-let units. After all, when your tenants start browsing property portals in search of their next home, they’ll start with a location or postcode search. So, while a property may boast style, eco-friendliness, and competitive pricing, its appeal can slip significantly if it’s situated in a remote area far away from transport links and amenities.

It’s no wonder many landlords opt to purchase properties in cities like Birmingham, Manchester, and Bristol, which consistently outperform growth forecasts thanks to their robust regeneration efforts, excellent transport links, and vibrant cultural scenes. However, regional towns are increasingly enticing to buy-to-let investors as rising rents in urban cores have started to price out many tenants. In fact, rents have increased twice as fast as earnings in cities such as Glasgow, London and Manchester, driving them towards commuter-friendly locales.

The key lies in selecting locations with easy access to amenities, employment hubs, and landmarks. Even for properties in regional towns, prioritising connectivity via rail and road networks ensures tenants can easily access essential destinations. So, before you place an offer on your next investment property, consider what’s outside your unit and how it will serve your prospective tenants.

Find Your Next Investment Property With Centrick Invest

Here at Centrick Invest, we are your partners when it comes to property investment. Whether you’re working to refine your portfolio, dive headfirst into the world of property investment, or simply want to explore your options – we’re here to help. Contact our friendly team of property investment experts here, or download our comprehensive guide to UK property investment – Smart Investing – using the form below.

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