Familiarity with local area and proximity to home also among top considerations
New research has found that landlords prioritise making their properties suitable for their preferred tenant type over making profits.
The research into landlord investment strategies, undertaken for Paragon Bank’s Landlord Report 2022, found that when expanding portfolios, the top priority is ensuring that properties are suitable for their preferred tenant type, chosen by just over half, or 51%, of the 621 landlords surveyed.
This was followed by familiarity with the local area, chosen by 48% of landlords, and close proximity to their own homes, a priority for four in 10.
Financial aspects of investments were less important to landlords. The potential for capital gains is a priority for 37%, purchasing for high yields a primary strategy for 32%, and low purchase price a key factor for 31% of landlords.
David, a landlord from County Durham who manages a 20-property portfolio with his wife Joanne, shared that living close to their portfolio meant he can respond quickly to tenant requests for assistance.
“Buying in a town where I grew up also means that I know street by street where the good properties are, and which areas to avoid,” he said.
“I attend every letting viewing with the agent in order to meet all prospective tenants to discuss their needs, wants and background on the day.”
Richard Rowntree, managing director for mortgages at Paragon Bank, noted that it was interesting to see that considering how properties meet the needs of tenants is central to landlords’ investment strategy, and more important than generating high yields or capital appreciation.
“This is perhaps at odds with the negative perception of landlords who are sometimes viewed as placing profits above people,” Rowntree said.
“Highlighting such misconceptions and helping people to better understand buy-to-let investors is what we’ve set out to do with our Landlord Report, something we hope will be valuable for brokers and others within the mortgage industry.”
