Landlords should 'really understand' their local market

People who are looking to let out their property to rent to other people on a monthly basis will be well aware of the current market conditions when it comes to setting their asking price. Demand for properties across the country at the moment means that rental yields are higher than they have ever been, and anyone in the sector will be aware of this.

However, it is also vital to make sure as a landlord that they are taking time out to understand the situation closer to home, and the market that they will be specifically operating in. This means, if they are working in Surrey for example, they could take time out to find out that Guildford is now seeing some of the most unaffordable properties for sale in the whole country.

This means that there will be more people looking to rent rather than buy, and this rise in demand will mean that landlords can charge a higher premium when they are letting out their property.

David Lawrenson, private rented sector expert at LettingFocus.com, said that it is also good to know about what areas will be good in the future through a little bit of prediction and foresight. For example, he said that those people who were looking to purchase buy-to-let homes in Stratford in the last few years will now be seeing a post-Olympic slump. He added that this will only worsen in years to come when more Olympic athletes' flats are released for general sale.

Any over-saturation of a market like this is only likely to see a drop in property prices on a monthly basis.

"People get carried away about a hyped investment generated by property clubs and others to try and get people to buy all of this new-build stock, but there are just too many flats and too much supply in one area. There has been a lot of hype around the Olympic Games, but it doesn't mean anything in terms of rental growth and the price of property. That is a bad place to invest," he added.