Tips for Novice Landlords


If you’re considering taking a step into the world of property investment, it’s important to understand what makes a sound investment. From finding the right property in the right location to calculating yields and finding a great letting agent, here’s what you need to consider:

Investment budget

When purchasing a buy-to-let property you’ll need a good deposit and a mortgage (unless buying outright without a mortgage). Buy-to-let mortgages are more expensive than residential mortgages with higher interest rates and arrangement fees, and you’ll need to put down at least 25% of the property value.

Before purchasing the property, talk to local agents to find out how much you can expect to rent the property for. Mortgage lenders typically request that the rent covers 125% to 145% of the mortgage repayments.

It’s also important that you have enough money for void periods and maintenance. Talk to a mortgage broker to work out what you can afford and to discuss the mortgage application process.

Rental yield

It’s essential that you buy a property in an area with strong growth potential as well as a healthy rental yield. The rental yield is the measure of return – or how much you’ll earn from your investment. It’s calculated as a percentage of the value of your property – and as a rule of thumb, you should achieve a yield of 5% or more. This will depend on where you buy, the type of property you invest in, and how much you can expect to rent out the property for.

A rental income of £10,000 per year on a property costing £200,000 gives you a 5% yield. A rental income of £20,000 a year on the same property gives you a 10% yield.

With property in Glasgow generally falling below the UK average, this means that your rental yield will typically be higher.

Investing in Glasgow property

Glasgow has the largest economy in Scotland and the fourth largest in the UK. Much of Glasgow’s shipyard areas have been regenerated including the SECC, SSE Hydro arena, Pacific Quay and the International Financial Services District with a large number of offices. It also has one of the largest student areas with 27,000 students at the University of Glasgow with the largest campus in the West End, the University of Strathclyde with 21,500 students and Glasgow Caledonian University with 16,500 students.

According to Hometrack, Glasgow is one of the cheapest cities in the UK to invest in property with a fast time to let and good rental yields especially in Glasgow’s West End where demand is consistently high.

The West End is one of the most popular areas in which to live – it’s ideal for young professionals due to its proximity to the city centre, with a large campus and plenty of great bars, restaurants and independent shops it’s extremely popular with students, and there are several good schools in the area along with some beautiful period properties making it a good location for growing families. With its unique character, beautiful architecture and green open spaces, demand for property here is extremely high. Byres Road is the centre of the West End and popular areas including Hillhead, Dowanhill, Kelvinside, Broomland, Anniesland, Yorkhill, Finnieston, Partick, Garnethill and Hyndland.

Yields for G11 and G12 postcodes are around 5%, while in G13 they are around 6%.

Property type

Consider who you want to rent your property to – students, families or young professionals – and what they will be looking for. For example, professionals will want to be close to transport links, students will want to be close to amenities and college campuses and families will be looking at school catchments. Make sure you talk to letting agents about whether the property is suitable for your target tenants.

Draw up a list of areas, take a look at area guides and the latest housing index, and current rental values.

Using an agent

A good letting agent will not only help you to set a realistic rental income, they will also advise on getting your property rental-ready and ensure you have all the documentation required. They will also advertise the property, vet potential tenants, draw up the rental agreements, handle the deposits and collect the rental payments each month.

Talk to us if you are considering property investment or would like advice on letting out your property in Glasgow.