Investment Property in Liverpool - Location, Rent and Letting Agents
Sunday 25th July 2021
As the property market in Liverpool and Wirral springs back to life, it's worth focussing on what attracts tenants to a property at market leading rents.
Undoubtedly, as ever, location of the property is important, but, in our experience, not critical. As a buy to let investor, you should focus firstly on where demand from tenants is, not necessarily demand from buyers. They are two entirely separate markets. The fact that you may not wish to live in a particular area, does not mean that other people do not want to rent there.
As an investment property company in Liverpool and Wirral, we target certain postcodes - even specific roads - which we know are areas where properties rent well, for long periods and at market leading rents. We also personally own properties and blocks in the same areas.
Investment Property Liverpool and Wirral
The days of 'Generation Rent' accepting any property, regardless of condition, are thankfully long gone. A buy to let property does not need to be state-of-the-art, but to obtain the best rent, it needs to be well-decorated, clean, safe and legally-compliant. Not a lot to ask.
At Tuna Fish, we advise our buy to let landlords to be patient and not to rush to take the first tenant that comes along without first market testing the rent. A property may have rented for some years at £550 per calendar month (pcm). OK, that's fine, but has anyone tested whether there is interest in renting the property at £600 pcm or even £625 pcm? At £625, the additional gross income in a year is £900 - a sum not to be scoffed at. Now that the market is picking up, we test market rents, as a matter of course, where we believe we may be able to achieve a higher rent than previously.
As we go to press, we have just market tested a rent in L19 Liverpool and had an offer via our lettings board within 2 days at the higher rent. The increase is 11%. The board has attracted 14 enquiries and there is no need to advertise on a portal, such is the demand in this area for quality family homes.
Letting and Property Management Agents in Liverpool and Wirral
As with anything in life, there are good letting and property management agents and some not so good. Key factors to consider when choosing your Liverpool letting agent are price (fees), ownership of the letting agent and/or location. More on this below.
Letting Agent Fees Liverpool and Wirral
The range in letting and property management agents' fees for essentially the same job (let a property at an acceptable rent, pay the landlord every month and manage both the real estate and tenant) is huge. Many letting agents in Liverpool and Wirral have large overheads as often they have expensive city centre offices, they may be part of a chain with other expensive offices to maintain, frequently have branded cars, print expensive brochures etc. These costs are covered by you, the landlord, hence you are charged expensive fees which significantly and negatively impact on your net return. There is an interesting article here, where you can see that in some cases letting agents in Liverpool and Wirral have taken 40% of the landlord's rental income.
Pressure on many lettings and property management agents has been exacerbated by the recent change in law which saw the abolition of tenants' fees which letting and property management agents routinely charged tenants to significantly boost revenue. Who do you think is covering these costs now? You guessed it, the costs are generally passed straight to landlords, causing an additional drain on their rental income. By the way, Tuna Fish has never charged tenants' fees and, therefore, has not been remotely impacted by the aforementioned legislative change.
Ownership of the Lettings and Property Management Agent
In all cases where the rental property is located in Liverpool, Wirral and its surrounding areas, we strongly recommend the instruction of a locally owned lettings agent. The overhead will, generally, be much lower, and, therefore, the fees charged to landlords and decisions will be made and executed locally, not in the corporate HQ in London, New York or wherever else the head office may be situated.
Location of the Lettings and Property Management Agent
In our experience, it is simply not possible to manage a rental property effectively in terms of cost or in practice, if the letting and property management agent is not based locally. We could write a book of all the issues which we have been called upon to resolve (as block manager), where the agent appointed to manage the property is attempting to do so from outside the local area.
In one case, a tenant called to complain of a serious water leak which took over 48 hours to resolve because the owner of the apartment had instructed an agent from Manchester, over forty miles away, to manage the property in question. It is a fact of life that property and tenant-related issues crop up from time to time, including block managers needing to obtain access to apartments, repairs to faulty locks, anything really. In most cases, the issues are relatively simple and inexpensive to resolve if the lettings and property management agent is local.
Tuna Fish has people available at the drop of a hat to jump into a car, if required, and we have good local knowledge and a team of people to call upon to fix any problems asap. On the contrary, where the agent is not local, sky-high costs can be racked up for relatively minor issues if the agent is travelling unnecessarily long distances or has to appoint a further, not necessarily well-known or trusted third party to try to resolve the problem. It may seem obvious but, still, it does happen.
Liverpool and Wirral Property Market
As we emerge from the pandemic, there are signs that the buy to let and homebuyer sectors are going from strength to strength (capital values up 8% year on year) and renters are beginning to returning to the city centre, having never left the traditional blue collar areas. We've started taking enquiries again recently from overseas students looking for accommodation in September and October for the new academic year, for example.
Finally, I would like to welcome Jade to Tuna Fish who has recently graduated from the excellent Liverpool John Moores University Real Estate course with a First Class honours degree. Her passion is asset management and valuations and we look forward to discussing and incorporating the very latest ideas.
For those in UK, enjoy the heatwave and hope that you may be able to have a break over the summer holidays after a particularly difficult 18 months for us all, not just here, but globally.