If you are considering a move onto the property ladder then consider buying a house to rent to young families. Maybe you haven’t considered it because properties are often too costly, but remember that what you invest now could appeal to a less risky market. And with less risk, there’s less cost and less work involved. Whatever your reasons for not wanting to rent to families, let us give you a reason why you should at least consider it.

It’s all about accidental damage

Accidental damage is one of the top types of claims made by Landlords on their insurance. According to our data accidental damage accounted for over 16% of claims made to Simple Landlord’s Insurance in 2012. What’s more is that the risk is the third fastest growing claim type, with the volume of claims rising 70% since 2011.
The surprising thing is that in postcodes with large populations of young children Landlords make much smaller claims for damage. This suggests that areas that have more children and perhaps rental markets with more young families present less risk to your property. Buying a rental property near Greenwich’s Annandale Primary School or St Albans Maple Primary School looking good yet?
Put it this way, cleaning stains from wax crayons from upholstery, repainting scuffs and handprints on the walls and even re-papering the bedroom of the miniature Picasso is cheap and easy.

The bigger picture for family tenants

The main things that parents of young children tend to focus on are location and security. They are more community conscious, invest in protecting their children and spend a lot more time at home. Instinctively, they detect and create areas with reduced risk to damage and theft. Combined, these factors expose your property to less risk of theft and, in addition, the increased time they spend on the property means that the tenants often make most minor reparations themselves.
One more thing to consider is that young children tend to accrue less valuable items than their teenage equivalents. While the risk of theft is still present, there are fewer electronics, games consoles, and laptops to entice thieves.

Changing tenants is easier with families

Perhaps the leading incentive to buy a home that would appeal to young families is the demand. Recently the Telegraph reported that the average rental property yields 7% on investment every year and they recommend buying in school catchment areas simply because the demand is very high. http://www.telegraph.co.uk/property/investmentinproperty/9778129/Why-buy-to-let-is-a-booming-business.html

Now let’s say that a tenant moves out. You will experience a period of time with an unoccupied and unrented property. You will also have to invest time and money into reparations and replacements in order to get the property back on the market. While 7% is considerably higher than most investment opportunities and much higher than your savings rates, these costs will take their toll on your investment yield.

The reason that young families can really benefit your portfolio is reducing the cost of transition. Not only is demand high, meaning that a suitable renter is easier to find, but the likelihood is that any accidental damage to the property is going to be minor.

You may have to hire a decorator to repaint the walls, varnish the banister or replace a couple of chair. In all, this work is not only cheap but very quick to source and turn around.

In fact, you may end up finding enough surpluses in your balances to apply some improvements almost cost-free to your property.

Tenants’ expectations are easier to manage

The key to the family market is that unlike young professionals, couples, and older tenants, taste plays a lot less of a role in determining their rental decisions. They will require that the property is furnished to a high standard but safety and quality will be much more important than brass faucets or a ceramic roll-top bath.

This has two great benefits for a landlord:

• The service life of any installed units will be extended
• No risky investment in luxury products

And your property will remain attractive to your target market, while offering you great value on furnishings.

Which postcodes attract young families

We’d recommend that you look into other costs before making your final decision, but, hopefully, this article will have convinced you to consider investing in a family home for your Buy-To-Let property.

If you do decide on buying for young families consider investing in the following UK regions:

• Barking and Dagenham
• Birmingham
• Greenwich
• St Albans
• Peterborough

In these regions, at least 1 in every 5 residents is under the age of 14 making the market in the areas ideal if you want to rent to a young family.

Article Provided By:
http://www.simplelandlordsinsurance.com/