Buy to let property continues to be one of the best performing asset classes.
Property can often appear simpler to understand than stocks and shares. We share 7 quick tips to help you on your way to your first buy to let property.
1. Research the market
Ensuring you are familiar with the pitfalls as well as the benefits is essential. Speak to people you may know who are already experienced buy-to-let investors.
A great place to start is to arrange a free property consultation with one of our experienced property experts, who will help you develop a realistic property investment strategy, tailored to you individual circumstances.
2. Choose a location
Choosing a property for buy to let is all about the location. Tenants, unlike buyers can move out at a months’ notice and will not hang around for a property that does not service their needs. Depending on your target market you will need to consider the proximity to local schools, transport links, employers, night life and so on.
Research using sites such as Prime Location or Right Move. You will be able to see what the going rent is for certain areas and, over time, see which properties take longer to rent out and which areas are popular.
Mayweather Estates tend to focus on city-centre locations where there is high demand for quality professional tenants.
3. Crunch some numbers
The excitement of looking around the property can take over all too quickly. Put pen to paper before you view properties and write down the cost of the house and the likely rental yield. Buy to let lenders often require a deposit, between 25% and 30% and the rental income to cover 125% of the mortgage repayments. Some lenders may accept less but at the expense of a low interest rate.
It is also important to have a contingency fund for when the property is not being rented and mortgage repayments must be met, as well as repairs, which ought to be fixed quickly else your tenant will vote with their feet.
Why not speak to one of our team of expert buy to let brokers who can help find you the best deal.
4. Don’t be over ambitious
Sure there are many who have made their millions from property, but experts suggest the days of double digit price rises are over. Focus on the long term and allow the rent to grow over time to help fund additional property investments.
5. Consider looking further afield
Most buy-to-let investors only consider properties near to where they live and it’s easy to see why – you’ll better know the areas and should anything go wrong you are local. That said your town may not be the best investment despite your inside knowledge. There may be other towns in need of rental property which you should seek out. Many buy to let property owners employ the services of a letting agent to handle tenants, meaning that being local to the property is not always necessary.
Most of our investors are not local to the properties they invest in. We work with a network of letting agents who will help let and manage your property.
6. Know the pitfalls
Don’t ignore what could go wrong. How many months can you afford to pay the mortgage should the property sit empty? The property market has been strong for some time; if there were to be a drop in value could you ride it out? A simple rule of thumb is to factor in the property sitting empty for two months of the year to provide a buffer, although in reality voids are much less than this
7. Consider how hands-on you want to be
Buying a property is only the first step. You will need to find a tenant, deal with enquiries and collect payment. It is possible to do this yourself but if you’ve a full time job, you may prefer to hand the property management to an agent. For a percentage fee they will find tenants, deal with problems and will have relationships with key professionals, should repairs be required. You can make more money by renting the property out yourself but be prepared to give up weekends and evenings on viewings, advertising and repairs.
Most of our investors choose to have their properties manage for them. Our team of property professionals can ensure your investment is as hands-free as you want it to be.
Want More Information?
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Alternatively feel free to contact one of our investment specialists on 0161 212 7414. Or visit our website today www.mayweatherestates.com