5 Things to Consider When Investing in a Buy-to-Let Property

June 1, 2018 10:55 am Published by

Considering investing in a property portfolio? Or are you a landlord looking to make the most of your investment? We’ve put together these top tips to help you navigate the ever-changing Buy-to-Let (BTL) market.

  1. Do your homework

Doing your homework is critical. You’ll need to be able to adapt to the constant BTL regulatory and policy changes and also ensure you’re getting financial advice on your own tax position and the impact the changes will have. Monitor industry news to keep up-to-date with all new developments.

  1. Location, location, location!

Desirable areas to rent are usually well known, but if you can spot the new up-and-coming areas, these could be a great opportunity. You will also want to think about whether the location is in a commuter belt or near well-regarded schools and hospitals. Watch out for any major infrastructure projects or local developments, as these can greatly affect the money landlords make on their investments.

  1. Rental yields

The rental yield is the annual rental income as a percentage of the property value. Understanding the potential profitability will help you identify the properties and locations that best suit your budget. Before you start your search, take some time to think about your budget and the rent you are likely to get. Also don’t forget factors such as maintenance costs!

  1. Choosing the right property

Again research is essential. Look at the local market and get to know the popular areas for different types of renters, such as students or families. Study the tenants you are looking to target. Professionals, for example, may be looking for a modern, stylish apartment. Alternatively, the main focus for families might be more space.

  1. Securing finance

When it comes to getting a buy-to-let mortgage, a good broker is vital. They will be able to offer advice and point you towards deals you will actually secure. We work regularly with John Demetriou of JDFS and you can contact him at john@jdfs.co.uk.

The buy-to-let mortgage you will be offered depends on your circumstances and the lender’s criteria. Ideally, they prefer bigger deposits, strong rent to mortgage payments cover and healthy earnings elsewhere.

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This post was written by Innermedia Ltd

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