Buy to lets are still a healthy investment with decent rental yields in many areas, coupled with the continuing rise of house prices. Even though recent tax changes, increased legislation, regulations and licensing have made things more difficult, it is still a viable option. Here are five tips for a successful buy to let.
Research the market
Find out all you can about the rental market before making a decision: you need to make sure it is the right investment for you. Buy to lets tend to be a long-term investment, so you need to be certain you want to tie your money up. Look at rental yields to see if your money would grow better in an investment fund or high-rate savings account. Many people have made substantial money from property investment, both from the income and capital gains, but you must weigh up all the pros and cons.
Get the location right
You need to look at the location carefully. Some offer far better yields than others, with the north and north-west England being good areas. In addition, you need to look at a property from a tenant’s point of view: is it in a good commuter area? Are good schools nearby? Is it close to shops or a health centre?
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Choose your tenants
You also need to decide what type of tenants interest you. Are you looking at letting to families, professionals or students? This will affect the location and the type of property you invest in. Are you going to offer furnished or unfurnished accommodation? Whatever you decide, you will need to protect your investment, including fixtures and furnishings, with cheap landlords insurance, such as policies from https://brokersdirect.co.uk/?product=landlords-insurance.
Calculating your profit
You will need to factor in additional costs to see if your property is profitable. Weigh up the rent you are likely to get against costs such as mortgage repayments, taxes, maintenance, repairs and void periods when the property is empty. Then ensure your rent will cover all eventualities so you do not make a loss.
Shop around for a mortgage
Do not just go to your own bank and ask about mortgages; it pays to shop around. Many banks and building societies offer buy-to-let mortgages but an independent broker or financial advisor will know more about what deals are right for you.
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