Landlords are misjudging tenants’ needs and risk losing out on optimum rental yields and capital returns, according to a new survey.

The survey commissioned by the Homebuyer Show revealed that landlords are overestimating the importance of proximity to good schools and underestimating the importance of proximity to restaurants, bars and leisure facilities.

The greatest difference in opinion arose over the value of proximity to restaurants, bars and leisure facilities with 70% of tenants polled considering this factor important, compared with only 45% of landlords. Landlords also did not realise the need of a garden or proximity to open space, with only 38% selecting it compared to over half of tenants.

In contrast, 45% of landlords thought that good schools were an important reason for choosing a rental property, compared to less than a quarter of tenants.

Surprisingly, only 57% of tenants said that having the property and furnishings in good condition were deciding factors as compared to 45% of landlords. However, landlords did correctly identify the top three factors valued by tenants as proximity to good transport links, proximity to shops and high street facilities and a safe and pleasant neighbourhood.

Nick Clark, managing director of the Homebuyer Show commented: “With almost half of previous visitors to the show planning to purchase a UK buy-to-let property in 2007, it is important that both novice and professional landlords do their research into the age and type of tenant likely to be looking to rent in any particular area. This way, landlords will be able to maximise their returns and avoid seeing the property sitting empty.”

“Landlords can often make the mistake of choosing a property that they like without proper consideration of the needs and lifestyle of the tenants, whether they are students, young professionals, or immigrants.”

Experts at the Homebuyer Show will be on hand to advise on all aspects of ‘buy-to-let’ investment, from choosing a property to financing the investment and dealing with tenants. The show runs from Friday 2 to Sunday 4 March at the ExCeL Centre in London’s Docklands.