When it comes to investing in property, there are a number of metrics you can track. These let you know whether or not that proposed deal of yours is as attractive as it appears on paper.
Buy to let metrics
Which metrics you use depends on why you’re buying the property and who it’s for. You would be consulting different metrics if you were investing in a three to four-bedroom house as a buy to let for a family than you would for a young professional, for instance. In the instance of the family, you’d want to look at schools in the area and what their Ofsted rating was. This is the government’s school guide, which rates schools on education attainment, as well as the facilities it provides and how big the school roll is.
Staying with the family you would also be interested in the demographics of the area (a lot of families means plenty of family-friendly facilities). A quick look at the government’s Official Labour Market Statistics (NOMIS) data will let you know the age, education levels, employment levels and marital status of those living in a particular area.
Then, there are crime levels. Again, the government produces statistics on these, including hotspots in the area and the occurrence of particular types of crime e.g. break-ins, assaults etc. All of the above are markers towards whether or not a family will want to rent your investment property.
Investment potential
Another crucial metric (perhaps the most important of all, when it comes to buy to let) is yield i.e. how much money you stand to make on your investment as a percentage once you’ve divided your proposed annual rental income by the value of the property, and multiplied that figure by 100.
HMO analysis
If you’re considering buying a HMO, then you’ll find software via the website Propertydata.co.uk which can tell you how many HMOs are in an area, the number of rooms, whether there is parking available and even disabled access.
Rental analysis
Want to know how much rent you can reasonably expect to charge tenants from your buy to let? Then it’s possible to compare average rentals in particular areas. The website Home.co.uk even tells you how many rentals there are, the number of bedrooms in each and how many days each type of property (flat, semi-detached home etc.) sits on the market before before a tenant moves in.
Land data
Those planning to self-build or buy land to sell on to developers will no doubt be interested to know what the fibre internet connection is like for nearby postcodes. Also, the flood risk level will be of interest, and whether or not there has been any recent planning applications for an area you yourself may be interested in. Again, Propertydata can help here – so too can checking the local authorities planning minutes.
Other useful metric software tools
GetRentr.com tracks licensing regulations in local authorities throughout the UK. This gives landlords and letting agents the confidence that they are being compliant and will avoid any future fines.
Costar.co.uk provides real time insight with data into the commercial property market in the UK and internationally. It will let you know if a property has been let, sold, the lease expired, tenants moving in or even if the building is about to be pulled down.
