Why every buy-to-let investor should consider an investment in second-hand property

Property investment offers a wide range of solutions to investors who are looking to build wealth through one of the most sought-after asset classes in the world.

Be it new developments in areas of high rental demand or short-term lets in favourite holiday destinations, investors in the UK have a variety of options to choose from.

One of the most overlooked, however, is second-hand property. While new developments offer strong promise of capital growth and rental returns, the hidden value of pre-owned property shouldn’t be underestimated.

Join us as we unearth the hidden value of second-hand property and why every savvy investor should consider it for their next buy-to-let purchase. 

1. Affordability

One of the key reasons why UK second-hand property is such a lucrative investment is the value for money it presents. Compared to new developments, second-hand property can often be purchased at a discounted price that immediately allows an investor to see a return on investment.

This could be for a number of reasons:

• a seller may be an owner-occupier who’s leaving the area
• they may be another investor looking to exit their investment quickly or even raise capital for other projects.

2. Location, location… infrastructure

The very nature of second-hand property means that often this property type is situated in well-established areas with existing infrastructure.

A developed location with transport links, educational and healthcare institutions and retail hubs can significantly boost the appeal of any investment. These amenities create a desirable living environment that not only enhances rental demand to ensure a property generates cash flow over its lifespan but can also increase the long-term value of the property itself. 

3. Proven rental performance

Existing property comes with one thing that any new build development can only forecast: historical data for that exact property.

Data on rental growth and yield ensures investors can determine whether or not they feel the property is worth purchasing. This historical data not only provides valuable insight into what sort of cash flow the property can generate on a monthly basis once purchased, but allows for more informed decisions about how to approach the investment.

For example, if the data suggests low vacancy rates and strong rental trends in the surrounding area, an investor can be confident that the property will generate a steady stream of income and maximise their returns. If however, vacancy rates are high but so is rental demand, it can indicate that the property is in need of investment but could have significant upside potential if managed correctly. 

4. Value appreciation

Another key reason many investors should consider second-hand properties is their potential for value appreciation. Selecting the right property in desirable locations that may have been overlooked can mean that not only is an investor getting a potential “hidden gem” at a discounted price but they can also benefit from the natural appreciation in value that comes with established locations.

This (paired with renovations) can further enhance the property’s value, increasing rental income or future sale price. 

Investing in UK second-hand property can be a wise decision for any investor looking for affordability, stable returns and potential value appreciation.

The right property in the right location is what many investors spend years looking for. But remember, these investments may already be available in areas you hadn’t previously considered. Established locations with proven rental performance are key performance indicators of a good investment.

By carefully assessing market trends and conducting thorough due diligence, astute investors can seize investment opportunities that others may have not considered and help take their property portfolio to new heights. 

Ready to start your second-hand property search? Book in a call with one of our specialist consultants or start browsing hundreds of properties on our marketplace.