Though tougher than it perhaps once was, due to tax increases on rental property purchases and on rental income, investing in property to let out is still an attractive option for many with money to invest, especially with the property market on the up.
From carrying out thorough due diligence, to finding the right tenants, here are some points to consider:
Do your research
The best chance of success is carrying out due diligence in order to decide whether buy-to-let is the sensible place to invest your money and if you can picture yourself being a landlord. Ask yourself what you know about the market and how properties have performed in recent years. If you know people that are in the buy-to-let business, make the effort to ask them about all the pros and cons. Get their perspective on practical matters such as how they manage their properties, things such as problem tenants and how they cover costs during spells between paying tenants.
Decide on the ideal area
A good place to start is to investigate a variety of areas, helping to narrow down your search when it comes to individual properties. Avoid looking into the most expensive or cheapest areas but recognise places that have an increasing appeal or ‘buzz’ about them that have the most promising prospects. Somewhere that is up-and-coming can mean you catch a bargain whilst in the knowledge that there is growing desirability to move to that area. Research the current property value in and check it out in person to assess transport links, local amenities, schooling and who is already living there. Deciding on why a certain area has an appeal will help you decide on who your ideal tenants will be. If you know a local landlord, again get in touch to ask their opinion.
The right property
If you have minimal funds, perhaps investing in a doer-upper to then let out is the best option, however it’s important that you’re honest with yourself as to whether you have time to do DIY work yourself or if there is room in the budget to get contractors in. Adding value to a property like can help to future proof your investment, maximise your rental return and the overall property value. If you are looking for a quick turnaround, somewhere in move-in condition is likely to be better. You are likely in a good position as a buyer, not having to sell your own property or being caught up in a chain, so haggle for the best price possible when it comes to putting in an offer.
At the mortgage hub we will assist you in finding the right property for your investment and even negotiate the best price for you!
Work out the sums
It’s a big investment and there are always risks to consider, so a financial plan is essential. Factor in the costs of your own home as well as covering any mortgage repayments for your buy-to-let investments, not to mention unexpected maintenance costs and covering the mortgage payments between tenants when your property might be empty.
Market to specific tenants
Keep a target audience firmly in mind when viewing property, and you a more likely to fill your buy-to-let quickly. If you are near to a university or college, renting to students is a great idea and the properties you are viewing will need to be comfortable and clean but could be more basic, perhaps with furniture included. If you are looking in a popular family area, the properties need to have enough space, with 2 or more bedrooms, and be near to schools and local amenities. Young professionals might be looking for more luxurious finishing touches and proximity to the city centre or transport links and nightlife.
Ensure you have the right mortgage deal
By using a whole of market mortgage broker you can be assured you will received the best advice and mortgage products to suit your needs. They will be able to advise you on any potential pitfalls and what level of rent would be required to support the mortgage etc.
Talk to us today about the best and most suitable buy-to-let mortgage products available for your circumstances.
The Mortgage Hub is an independent mortgage advisor serving the greater Glasgow area. Whether you are planning to buy your very first home and need the right first time buyer mortgage, or are looking to re-mortgage due to a house move or to growing family – we understand your journey is so much more than a financial process, it’s a journey to achieve your dreams, improve your lifestyle and achieve your true potential.