Tips when buying to let
Tue 21 Jun 2016
1) ‘Promising’ does not mean most expensive or cheapest. ‘Promising’ means a place where people would like to live and this can be for a variety of reasons.
Where in your town has special appeal? If you’re in a commuter belt, where has good transport? Where are the good schools for young families? Where do the students want to live? You need to match the kind of property you can afford and want to buy with locations that people who would want to live in those homes would choose.
These questions might sound overly simplistic, but they are probably the most important aspect of a successful buy-to-let investment.
In most cases people tend to invest in property close to where they live. On the plus side, they are likely to know this market better than anywhere else and can spot the kind of property and location that will do well. They also have a much better chance of keeping tabs on the property.
Yet it is also worth bearing in mind that if you’re a homeowner then you are already exposed to property where you live - and looking for a different type of home in a different area might be a good move.
2) Before you begin looking at properties, sit down with a pen and paper and write down the cost of houses you’re going to view and the rent you are likely to get. A good Estate Agent with a lettings department will be able to give you this information.
Once you have the mortgage rate and an achievable rent sorted then you must be clinical in deciding whether your investment work out. Don't forget to factor in maintenance costs. What will happen if the property sits empty for a month or two? These are all things to consider. Make sure you know how much the mortgage repayments will be.
3) Instead of imagining whether you would like to live in your investment property, put yourself in the shoes of your target tenant. Who are they and what do they want?
If they are students, it needs to be easy to clean and comfortable, but not luxurious. If they are young professionals it should be modern and stylish but not overbearing. If it’s a family, they will have plenty of their own belongings and need a blank canvas.
Remember that allowing tenants to make their mark on a property, such as by decorating, adding pictures, or you taking out unwanted furniture, makes it feel more like home.
These tenants will stay for longer, which is great news for a landlord.