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What is better for Buy-to-Let, house or flat?

Jun 17, 2022 | Article

What is better for Buy-to-Let, house or flat?

Landlord property investment has become increasingly popular and trends would back that more people are exploring the option of buying to let as an investment opportunity. A curveball in today’s investment society is always the question of “should you go for a house or a flat?”. There will be different reasons for why you should do either, however, we aim to help you make that decision with a lot more ease.

Investing in buy to let

Investing in rental properties is very common. It can be very profitable subject to doing relevant research on the market and ensuring your price correctly for your property. The buy-to-let strategy is the most common form of property investment. Flats and houses are the most common in terms of property type.

In this blog article, we help to aid your investment process by helping you decide whether to buy a house or a flat. There are benefits and drawbacks to each, which is why you should keep all the aspects in mind.

Buy to let: Houses

Houses are usually sought after by families and people looking for a garden or outdoor space. Most houses come with this in the form of a front garden or a back yard. Tenants with pets will usually look for a property that has a garden. This is also popular with renters that have, or plan to have, children.

Families will seek larger houses if they are in a position to do so. Flats are usually small studios or one or two-bed apartments. You can find larger flats, but these tend to be high-end properties in cities like London or purpose-built city centre student accommodations.

On top of this, houses will grow in value faster than flats. If it is value growth you are after a house may be the right option.

There is also the potential for extensions and conversions within houses. You could do a loft conversion to create an extra bedroom which would add value to the property. Rooms like conservatories can be built to add living space.

However, the flip side must also be considered:

Flats are usually cheaper due to being smaller in space. If you’re thinking of buying a flat as an investment property it is important to consider the following.

Flats are popular with tenants looking for a place to stay close to amenities and workplaces. If you were to invest in a city centre flat, the demand is likely to be high, therefore will be easier for you, as a property owner, to reduce the vacancy period of your properties. Flats can appeal to tenants who are more likely to live in city centres because that’s where their jobs are likely to be. However, the current trend of companies opting more and more for the “work from home“ option is something to keep in mind. That said, there will always be people who need to travel to work and would rather live in their office area.

Landlords are always required to maintain their rental properties. With houses, more issues can arise. For example, issues with gardens or issues in larger/more frequent rooms. Whereas flats can be easier to maintain as there is not much space.

Flats will also require maintenance, as well as the need to maintain communal areas. If work needs doing to the fabric of the building, it can become expensive depending on the size of the building.

However, property management can be made easy using the property management software we have here at Lofti. Our end-to-end software covers everything from pre-tenancy referencing all the way down to repair management and reporting, all in one system. Whether you are dealing with HMO properties, a portfolio of houses or flats our systems can be used for you to seamlessly manage your portfolio.

Flats are likely to be leasehold properties. Leasehold properties can come with the charges of ground rent and service charges. This covers the maintenance of communal areas.

There will always be advantages and disadvantages to what type of property to invest in. Overall, it is important to market your property to the target tenant and make sure you understand what your target tenant is looking for. Local lettings agents will be able to give you a feel for the value of the local market, however, research is definitely recommended so you can search for exactly what you want to see. Speak to local tenants and getting feedback is strongly suggested and no one better than your “clients” can tell you what other tenants are looking for when renting a property. Find out what they are after and effectively make decisions based on this.

We hope that this blog has provided you with some insight as to what approach you should take when deciding what type of property to purchase and manage.