Asking the right questions will help you buy right. Buying the right assets at the right price is the fundamental skill to building a property portfolio.
Here are the questions that we use when considering a short-term rental:
- Is the property freehold or leasehold?
- If freehold, can you please confirm that there are no restrictive covenants that would prohibit the use of the property as an Airbnb?
- If leasehold, can you please send me a copy of the lease so I can check the terms?
- How long has the property been on the market?
- Has the property dropped in price since listing with you?
- If so, when and by how much?
- Have there been any formal offers put forth to the vendor?
- Why is the vendor selling?
- Is the property currently occupied by the vendor?
- If so, how quickly are they looking to move?
- If not, are they planning to buy another property? How are they going to finance the sale?
- Is the vendor in a chain (looking to buy another property with the proceeds from the sale)?
- Has the property ever fallen through conveyancing?
- If so, why?
- Does the property have any history of subsidence or structural issues?
- Is there any history of disputes between the vendor and their neighbors?
Often, estate agents won’t know the answer to these questions. Ask them to contact the vendor to confirm and to send you an email with their responses. You’ll probably have to chase them to get answers, but that’s the culture we’re working with…
A little bit of effort up front can ensure that you end up viewing a property that will actually work as a short-term rental. You’re essentially looking for:
- A freehold property without restrictive covenants OR
- A leasehold property without limiting lease terms
- A vendor who is not in a chain and needs to sell quickly
- A property without a history of subsidence, serious damp, etc.
- A property without fussy neighbors who complain and cause issues
Building relationships with agents can have huge pay off
I find working with smaller estate agents like DPS and Attik to be much more enjoyable than some of the larger high-street agents. It’s better to work with a fewer number of agents who actually know what you’re looking for and can help you find better deals.
The better relationship you can build with the vendor’s agent the more likely they will be to help you out when the time comes. They’ll call you when a vendor is in a bind and needs to sell. They’ll push for a better price to ensure that a deal close. These gestures can be invaluable in the growth of your portfolio over time.
Having a clear definition of what you’re looking for will help you find the right deal at the right price. Being able to ask the same questions whenever booking a viewing will ensure that only qualified properties make it through to the viewing stage.
If you want to book a bunch of viewings just to see what is on the market, that’s fine. Just don’t waste your time making offers on properties to find out the lease prohibits Airbnb just before exchange…
I hope this was helpful! Let us know how your journey goes and if you ever need help managing your property. We’ll give you the amazing returns from a short-term rental without the hassle.
That way you can make more money, do less and do more of what you love!