Buy to Let guide
Choose the right property: what type of property will appeal to your target tenant?
Research the market using local estate agents, newspapers, websites and local authorities.
Select a location: visit the area and talk to local people and businesses. Check transport links, parks, shops and schools.
Choose a property and a location that will appeal to your target tenant, for example near a university or railway station.
Find tenants: know the type of tenant you’re looking for – student, professional, family.
Check tenants’ references and draw up a sound contract.
Manage the property: do you live close enough to deal with emergencies, or can you afford a letting agent?
Complete a full inventory of contents, furnishings and appliances.
Cost of Buying to Let
As well as your mortgage payments, you’ll need to pay for property upkeep and maintenance and buildings insurance. You’ll need to consider contents insurance if the property is furnished. You’ll also need to put money aside to cover your buy to let mortgage payments if the property is ever unoccupied.
If you’re using a letting agent, they usually charge to find a tenant and to manage the property. Shop around to make sure you're getting a good deal.
There are also taxes to consider, including stamp duty, income tax and capital gains tax. A good accountant could help you save a lot of money by managing your tax in the most efficient way.
Why Buy To Let?
Buying to let is both a potential source of income today and an investment for the future. If you find the right property and the right tenants, you could cover the property's mortgage payments and enjoy a regular income.
It may be best to think long term and have a clear idea of what you want from your Buy to Let investment. People buy to let for various reasons – having a monthly income, growing their capital, expanding their portfolio, providing security for their children. Therefore, setting clear goals will help you manage the risks of buying to let.
The size, location and rental yield are all important considerations when buying a property to let out or looking for a better deal on your Buy to Let mortgage.
Here are some tips for Buy to Let success:
- Decide on the type of property you want. This will help you choose the right property and location
- Consider all related costs and risks, including taxes, fees and emergency repairs and tenantless times
- Have clear goals: know what you want to achieve from your investment, is it additional income or a nest egg?
- Choose a Buy to Let mortgage that suits your needs and expected income