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Property is one of the biggest forms of investment in the UK, with thousands of people every year getting their foot on the property ladder. For most people, simply owning their own home and making certain changes to add value to their home is enough but there are lots who strive to make more from property investment or even make it a full time job. Buy to let properties have therefore become increasingly popular with more and more people choosing to make money from renting the property out to tenants in order to pay for their home or even make a living from it. However it isn’t an easy option and can be difficult and frustrating if you aren’t aware of certain factors. So here you can find lots of helpful tips to make buy to let easier and begin to see a good return on your investment.
Buy to let has become more popular due to low interest rates on savings, and therefore becomes a better alternative to invest your cash. If you have a large enough deposit, buy to let could well be the option for you. But it is important to be aware of rising interest rates, and be prepared for any increase in your mortgage repayments otherwise you could find yourself at risk of losing your property through repossession or opt to gain a quick house sale before this occurs. The dip in house prices and increase in prospective tenants certainly makes it a healthy environment to consider buy to let, but as with any investment it is high risk and comes with no guarantees. Prices may rise, tenants may not pay rent and your property may need high cost maintenance so having a contingency becomes a necessity rather than an option.
The first thing you need to do is research your market and work out what type of property you want and what your target market is. Research the types of mortgages available for buying to let as these differ from standard mortgages, and be aware of fees that are charged by lenders for buy to let schemes. Essentially the larger the deposit you can provide, the better interest rates you can achieve and the stronger position you are in if interest rates rise suddenly.
Once you have the right mortgage in place, you will then need to consider the property market. Area is always paramount when choosing a property and it is always advisable to choose an up and coming area good for commuters, students or families. Ideally the property you purchase for renting out to tenants needs to be suitable for your target market. Students don’t want to live in the middle of nowhere and families don’t particularly want to live near pubs and clubs, so consider the area carefully. You will also need to get an idea of the average rental prices in the area in order to work out if this can cover your mortgage repayments depending on the price of the property. You don’t want to end up struggling to meet mortgage payments due to a shortfall so remember to do your research!
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