In this article we’ll look at the top 10 tips for buying to let. A guide aimed at helping you get the most out of a bricks and mortar investment with the least amount of risk possible.
1. Research
The first step to take before making any major investment is to look at the current market. How well do you know the market? What are the current trends of the market? Are you aware of the risks that may be associated with the potential benefits of the investment?
2. Location
Where do people want to live? Think about the types of tenants that might move in; would they need good transport networks, local school access, walking distance to the nearest town etc?
3. Price
Take time to work out how much you can afford to pay. Look at how much rent you’re likely to receive. You’ll want to look at rent to cover 125% of the mortgage repayment.
4. Shop around
It might be tempting to take the first offer you receive for a mortgage, but look around and get a better price. You might find it helpful to go to a buy-to-let mortgage broker. They won’t charge you a fee and they can shop around for you.
5. Who is your ideal tenant?
Think carefully about what your ideal tenant is looking for. Ok, some properties might not have what you’re looking for in a home. But what would your tenants look for?
6. Invest carefully
It may be tempting to think about how much money you could make from a double digit house price rise. But, to be honest, those days have passed us. You need to be realistic and think about all your costs including mortgage and tax and ongoing expenses.
7. Don’t limit yourself
It’s tempting to choose a property location that’s close to where you live. But you might get better property value by looking further afield. You might want to keep an eye on your property by getting one close by, but a letting agent can do that for you if you went down that route.
8. Negotiate
Always negotiate for a better deal. Buying-to-let doesn’t carry the same risks as selling property to buy another. This gives you a great advantage when it comes to haggling over the price.
9. Know the risks
Research and evaluate all the things that could go wrong with your investment. It makes sense to plan for the worst; that way you’re prepared. For example: can you afford repairs to a properly? What will happen if your property’s vacant?
10. Your involvement
Will you manage your property yourself or appoint an agent? You’ll make more money by managing your own property, but you’ll need to give up a significant amount of your time with viewings, advertisements and repair work.