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Guid on how to Buy to Let

The buy-to-let market has grown tremendously in recent times. This has been driven by attractive prospects of getting decent returns from investment in the housing market. However, it can be difficult to make the leap into the market and become a landlord, particularly if you are doing this for the first time. Where do you start? How do you maximise the potential of your investment? What kind of property do you invest in? These are some questions you need to ask yourself when entering into the sector.

Planning

Like all important decisions in life, when you decide to play the buy to let game you will need to plan adequately and carefully. You don’t want to make huge investments in the hope of making a quick profit only to rue your decisions down the line when your investment fails to live up to expectations.

Consult experts in fields such as tax, property management, finance and legal affairs to get professional guidance on the best way to approach your investment. This will help you understand the costs involved in the whole process and allow you to plan with your eyes open for how you will meet the expenses. Consulting also helps prevent many unforeseen problems that can occur down the line.

Research

One of the most important things to do when investing in the property market is to research. It may sound obvious, but many investors actually fail to research thoroughly. This failure often results in harried investments on property that are less than the optimum choice for bringing in desired returns.

Key areas to research include the location of the property, target market, and the property type to purchase, including flats, cottages, studio apartments and bungalows. Visit potential locations personally to gauge their viability. Talk to area residents as well as area property agents to understand the kind of property that is most in demand and where the demand is coming from.

Also, research current market rates and compare these against the rates of the property you identify. This is important because it will help you better estimate the potential return of each property available for purchase. You may want to employ the services of a property search agent to help you find property that are the most likely to bring in the best return for money.

Financing

Another big area to put into consideration is how you will finance purchase of the property you want. Here, you should not only consider the upfront cost of the property, but also the developing and long-term, on-going maintenance costs of the property. A buy to let mortgage is the most common way to finance investment in the housing market.

Many buy-to-let mortgage offers are available through mainstream banks as well as specialised mortgage lenders. These property mortgages tend to have higher rates than traditional loans, but they are the more suited to ride the waves of changing dynamics in the rental sector. Sign up for a buy-to-let mortgage that has affordable rates and friendly repayment terms to ensure your investment is sails through smoothly.

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