The Association of Residential Letting Agents (ARLA) recently revealed that with the exception of London, landlords are most likely to opt for properties that are less than 10 years old.
Find a new mortgage deal
But according to Landlord Mortgages, this is a very worrying statistic as it means that rather than purchasing a property and making improvements to add value, these property investors are heavily reliant on capital appreciation.
Lee Grandin, managing director of Landlord Mortgages, said: This is not a problem in a steadily growing market, but if we should experience any sort of slowdown or stagnation, landlords who decide to sell will be left with very little profit from their investment.
Find a best-buy mortgage
Indeed, if the market should fall, they may even find themselves owing their lender money.
However, if you really have your heart set on owning that property, here are top ten tips to help you avoid the potential pitfalls of age discrimination.
Commitment Examine why you want to purchase a new build property. Is it because you dont have the time to renovate a property? If so, do you actually have the time to manage your investment property? Make sure you have the commitment required to be a successful buy-to-let investor.
Genuine discount Only buy off-plan if your own research shows that you are getting a genuine discount on todays market value.
Financially viable Ensure the deal stacks-up both in terms of the minimum positive net cash flow you are prepared to accept and the maximum amount of capital you are prepared to leave in property.
Property sourcing companies Avoid them. Its better to do your own research and create your own deal with the developer.
Investor flooding Avoid developments where a high proportion of plots (30 per cent +) are being sold to investors rather than owner-occupiers. The only thing which will differentiate your property from the one next door will be the price, so you can expect long periods without rent unless you are prepared to drop your rental level.
Developer incentives Some developers can inflate the price and claim to offer incentives such as stamp duty paid.
Availability vs. demand Check thoroughly that there is a rental demand for the type of property you are buying. You could end up with a limited choice of lenders who may not be offering the most competitive rates.
Forward pricing Developers sometimes anticipate the value of a property at the time of completion and not today. This can work in your favour when the market is rising by more than 25% in a year but at other times investors should be wary.
Research Thorough research is crucial. Always do your own research and never rely on what you are told by those with a vested interest.
Check the finishes Some developers work very quickly to build and sell their properties. Therefore, it is important to ensure that in the battle to get finished, they havent neglected to complete various cosmetic jobs such as painting and grouting to a high standard.
