If you’re a landlord considering investing in a property in Cardiff, you’ve come to the right place. Perhaps you have properties in Wales already and are looking at broadening your portfolio, or maybe this will be your first property investment venture – whatever the reason, we’re here to help you understand whether it’s worth investing in a Cardiff property or not.
Our team of property experts have many years of experience in helping people sell their Cardiff homes, including those with tenants in situ, giving us a wealth of knowledge regarding the Cardiff rental market.
Just keep reading to find out everything you need to know about investing in a property in Cardiff, including whether it’s a good investment opportunity or if there are better areas to invest your cash.
What Does Cardiff’s Rental Market Look Like?
First things first. Let’s take a look at how much money you could expect to earn each month from a rental property in the Cardiff area.
The average rent in Cardiff is currently £1,483 Per Calendar Month (PCM), with the majority of these properties having at least two bedrooms. In the last 14 days alone, at least 209 properties have been listed for rent in the Cardiff area, showing that plenty of landlords are reaping the benefits of their Cardiff property investment.
What Rental Yield Can Investors Expect?
Rental yield is the financial return you should expect to receive by investing in a rental property, so it’s an important figure to understand when deciding whether to invest in a Cardiff property.
To calculate rental yield, you need to divide the annual rental income by the total value of a property. Let’s do this with our average figures for homes in the Cardiff area.
Based on the average rent for a property in Cardiff being £1,483 PCM and the average property price being £309,373, the rental yield for investing in a Cardiff property is 5.75%.
A good rental yield is around the 5% – 8% mark, which tells us that investing in a Cardiff property is certainly worth considering given its above-average rental yield.
How Can You Become a Landlord in Cardiff?
So, what are the steps you need to take to get the ball rolling on becoming a landlord in Cardiff? The process may seem daunting but don’t worry, we’ve broken down all the steps you need when it comes to investing in a Cardiff property.
Just keep reading to figure out all the stages you need to be aware of.
Consider Ongoing Costs
The first step you need to think about before investing in a Cardiff property is how many ongoing costs you’re going to have and whether this is feasible for you. Providing you purchase a property at the right price and achieve a good rental yield, it’s likely that your ongoing costs will be outweighed by the benefits of rental income – however, it’s important to consider all the ongoing costs you’ll be subjected to so you know exactly what your profits will be.
Here are a few of the main costs you’ll need to consider before investing in a Cardiff property:
- Repayments on your mortgage (not applicable if you’re a cash buyer)
- Tax & accountancy fees
- Management costs
- Set-up costs (property cleaning, certificates etc.)
- Regular maintenance fees
Once you understand the costs of each of the above items and are confident you can manage them, it’s time for the fun bit – to start looking for your Cardiff property!
Search For a Suitable Property
There are two main ways that you can find a suitable Cardiff property. The first is via the traditional housing market, e.g. finding a property via an online property site such as Rightmove/Zoopla, putting in an appropriate offer for a property, and ultimately having your offer accepted.
The second way is via an auction. Properties that are sold under auction usually require more work carrying out, however, this should be reflected in the sale price. You can pick up quite a bargain at auction, giving you great rental yield and making your investment more profitable.
When you’ve found the ideal property to invest in, you’ll need to decide if you require a Buy-To-Let mortgage. If you’re a cash buyer and are purchasing the property with money up-front, this step won’t be relevant for you. However, if you require a mortgage, you’ll need to take out a Buy-To-Let mortgage which will enable you to take out a loan for the property while collecting rental income/
The last step you need to take before you get onto property management is to ensure your property is fully up-to-date and compliant with the latest safety certificates/regulations. This may include electrical certifications, Energy Performance Certificates (EPCs), and other regulations. It’s key that your property is fully up to date with the latest certifications before you start renting it out to tenants.
Decide on Property Management
Now that your property is ready to let, you need to decide on property management. If you’re an experienced landlord, you may do this yourself or employ people to take care of this for you. Another option is to bring in an estate agent to help you manage the property on a regular basis.
While estate agents will require a fee for property management, they do carry out quite a lot of work as a part of this including the below tasks:
- Finding tenants for your property
- Management of ongoing rent payments
- Maintenance communications
- Regular property inspections
Invest in Landlord Insurance
The last step you should take when investing in a Cardiff property is making sure you’ve set up landlord insurance. Landlord insurance exists to prevent you from negative financial effects of unforeseen circumstances including the following:
- Repair in case of fire or flood
- Vandalism costs
- Broken appliances e.g. boilers
Landlord insurance is available from most large insurance companies and will help to compensate you if you experience a costly, unforeseen event in your rental property.
Some landlord insurances will include fixtures and fittings within their cover; however, we recommend that you liaise directly with an insurance company of your choice to find the best landlord insurance for you.
What Happens if you Want to Stop Investing?
If you invest in a Cardiff property but decide to stop investing somewhere down the line, We Buy Any Home can help.
We can help you to sell your property without removing your tenants, making your property an appealing investment for other landlords looking for a Cardiff property. As the biggest cash buyer in the UK, we can help sell your property quickly with your tenants in situ to avoid disturbance to your tenants and any lapse in rental income.
Providing the correct tenancy agreements are already in place, we can give you a cash offer for your property without needing your tenants to vacate the property.
Get a free cash offer by visiting our website today – you’ll receive a call from one of our friendly team members explaining the next steps in our process, and you could receive your property funds in as little as 7 days! We’ll even cover the costs of your conveyancer and survey fees – it doesn’t get much better than that.