Rental investments in brand new developments
CBRE have extensive experience in the new-build London property market. As the lettings and management arm of CBRE Residential, our teams often work with investor landlords who purchase apartments before they are completed. What should buy to let landlords look for when making a decision on where, and what to buy?
Know your target market. Whether your property will appeal to groups of sharers, single professionals, higher-income couples or families will all make a difference with what the market requires in terms of living space, specification, outside areas and proximity to transport.
If you are buying a property which is still being built, engage a reputable lettings agent as soon as you can. In our experience, when new developments launch, the rental market in that area can be flooded with similar properties all available to rent at the same time which has a downward effect on rents. By getting ahead of the curve it is sometimes possible to pre-let and avoid the rush.
Be realistic on the rent you are expecting to receive. Estimated rents provided by developers or selling agents when selling apartments in new build developments are likely to be based on a best case scenario, and not reflect possible over-supply at completion, as mentioned above. Ask for comparables or a second opinion.
Ensure you have a plan in place for when the apartment is complete and the developer hands it over to you. This is particularly important if you are based overseas, you will need to appoint someone, for example a surveyor, who can handle the handover process. Some agents, like ourselves, will offer a handover service to make sure the process is handled as smoothly as possible. We will deal with the developer on any faults and ensure the property is ready for letting. By liaising with our property management department we are also able to conduct the usual safety checks to comply with current legislation, before moving tenants in.
Many tenants will prefer to rent a furnished apartment and it is sometimes beneficial to hand the job over to a professional furniture contractor. Most agents will recommend one or two firms, and in our case, our preferred furnishing companies will usually create a bespoke package to fit with the development – taking into account colour palettes, room sizes and specification.