09 Oct Buy to let – things to consider before taking the plunge
If you are considering becoming a property investor in the buy to let business, there are a few things you need to consider before diving in at the deep end. PPS have created a blog to help you decide whether purchasing buy to let investment properties is for you!
The first thing you need to do is research. In the long term investing your money in property is a viable option but it is essential you familiarise yourself with all the risks associated with buy to let, especially if you need to secure a buy to let mortgage to pay for the property.
You must do your maths and calculate exactly what property you can afford to buy and you should also check the rent you could achieve for the chosen type of property you are interested in purchasing. If your are looking to secure a buy to let mortgage, most lenders will require a minimum of 15% as a deposit but some will demand as much as 25% and larger arrangement fees with higher rates not forgetting the possibility of rate rises. All this should be taken into account when you are calculating your budget. Consult a specialist buy to let mortgage broker to ensure you will get the best deal.
You will also have to consider how you are going to pay for your buy to let mortgage if you do not find a tenant immediately. Another factor to keep in mind is the cost of a letting agency if you require one as someone managing your property can come with a hefty price tag. If you choose to become a landlord and managing your buy to let property yourself be prepared to give up a lot of time even during evenings and weekends.
The areas you need to be looking for buy to let property depends on the type of tenants you are looking to rent to. If you are prepared to cater for students then sharable buy to let property located close to universities are vital however, you will also need to look for areas where crime rates are low and there are good transport links.
Once you have bought your first buy to let property, you need to consider the tenant. Students for example will not be too fussed about decor as long as the property is clean, easy to tidy and functional. However, young professionals will be attracted to more modern, stylish decor with a hint of luxury ad families will need lots of storage space with neutral surroundings where they can make their own mark on the property. When decorating your new buy to let property, keep in mind that you wont be living there so don’t purchase elaborate expensive fixtures and fittings.
We hope that this blog has been helpful and will aid you in your decision to become a buy to let property investor. If you would like to view BMV property which would make ideal buy to let investments, you can view our Latest Property Deals page.