Find out everything you need to know about buy to let. Learn what to buy, where to buy and what not to buy. All this information about buy to let won’t cost you a penny.
To Buy or Not to Buy an investment property for sale?
Demand and professional guidance
Find a letting agent and discuss the demand for properties in the areas you are interested in. They should also be able to indicate the level of rent you could expect to achieve and what type of tenancy is more suitable for the property and area.
Talk to Student letting officers – build rapport so they promote your property above others. They too can give you good advice on demand, i. e. where, why, how much etc.
* With more and more people turning to the internet to source suitable investment property for sale and for sellers looking to save on selling agent fees, more people are having the opportunity to buy and sell privately. The main difference being that you will liaise directly with the seller of the property. This may be via email or telephone. Viewings will be arranged directly between the buyer and seller and the negotiations regarding the price will be dealt with directly between the buyer and seller. However, you will still need to both appoint a solicitor to act on your behalves.
Buy to Let Mortgages
Finding the right buy to let mortgage is crucial to your success as a property investor. Unlike other forms of property investment, a lot of the capital you invest into a buy to let investment property is likely to be borrowed. Over the last few years, the buy to let mortgage market has boomed, with more and more lenders bringing out products making borrowing money to invest in this way even simpler than before. There are a number of different buy to let mortgage products available from fixed rates, discounted variable rates, base rate trackers to name a few. It is worth remembering that different products may be suitable for different investment properties.
However it is very important that you get the correct guidance with your finance. Questions that are worth considering when finding a suitable buy to let mortgage:
1. Do they have access to lots of different buy to let products in the market place?
2. Do they have the ability to create a long term investment property strategy for you?
3. Are they able to secure exclusive buy to let products?
4. Are they able to arrange buy to let mortgages within 10 working days?
Most lenders will offer a maximum loan of 85% requiring you to fund at least a 15% deposit. The buy to let mortgage industry is very competitive with new products being launched on a very regular basis.
Some brokers may charge a brokerage fee up to 2% to arrange the buy to let finance for you but don’t let this put you off because if they do have the ability to secure exclusive buy to let products for you, it could be very beneficial to your cashflow as a landlord. Plus, if they are able to reach formal mortgage offer stage in a very short space of time, this could result in you being able to secure investment property at very competitive prices if you have the ability to tell the vendor that you can have the deal completed within a matter of a few weeks. Find out more about buy to let mortgages, landlord inventories, tenancy agreements, landlord insurance, landlord tax, furnishing your buy to let and credit checking your tenants and see how you can start your investment property portfolio.
There are a few simple steps to remember:
Buy to Let Insurance
Preparing to let the investment property yourself?
Join your local Landlords association
Tenant Application form
Credit Check your Tenant
Charge a fee to tenants of around £100 for completion of tenancy agreements, referencing, inventory etc.
Deposit-take 5 - 7 weeks rent plus one months rent monthly in advance
Tenants often cancel standing orders on the month prior to final payment – if this happens you still have some money to cover damages
Get prepared. As much as we all like to think we can trust everyone, it is very important that ‘buy to let’ landlords protect their investment property as thoroughly as possible. Having an inventory in place will protect you against unnecessary costs and ensure that you are maximizing your profit at all times. For example; if your teaspoons kept going missing and the curtains kept leaving the poles when the tenants vacated, this could start to add up. Imagine if you had freshly decorated the buy to let property in a very neutral magnolia colour throughout to discover that your tenants had become creative one day and turned their hand to a bit of decorating to brighten the place up! Not only will this cost you in paint, but could potentially lose you income on rent whilst you are having to leave the investment property empty whilst it is being redecorated. And most importantly how can you prove that the property was that colour or condition in the first place. Its simple. A Comprehensive Landlord Inventory.
You will need to purchase a tenancy agreement. This will protect you and your tenants. There are a number of tenancy agreements that can be purchased off the shelf but it is important that you check the tenancy agreement to make sure it is suitable for the type of tenants you have. For example whether it is a family let or a property being let to sharers where they could be joint and several liability. A good solicitor would be able to draw up a suitable agreement and for your own peace of mind, this small investment could be a very worthwhile exercise.
Look after your tenants – They are a valuable asset to your investment property!!
Happy tenants will respect your property and will refer other potential tenants to you.
If the above is not cost effective or convenient for you then you should seriously consider employing the services of a property/Lettings manager.
Find out more about buy to let and how you can start.
Jennifer Tweed is the founder of buytolet4sale.com, one of the UK's first property portals dedicated to all types of investment property for sale and everything you should need for your sale and purchase. Learn more about buy to let .