If you are looking at buying, or already own a buy to let property, then there are many things to consider. Purchasing a house and finding a tenant are not the only issues, there are other matters to be taken into consideration when letting a property; such as the kinds of specific insurance your property will need, and whether the property meets health and safety requirements.
Outlined below are some top tips for anyone who currently owns or is considering purchasing a buy to let property in the future. Following this advice can ensure that not only do you get the property at the best price possible and find tenants, but that the property is secure and safe and generates that additional income to ensure it is a sensible investment in the first place.
1. Before you buy, work out the sums
If you are looking at buying to let, then you need to work out your budget. Once you have an idea of your budget for the house purchase, you need to then set aside another sum for any work that may or may not be needed on the property to make it habitable and in a condition that makes it suitable and attractive to a potential tenant. Once you have that information, you can then begin to work out the cost of additional items such as home cover for the property, council tax, water rates.
These additional items, when combined with the mortgage repayments for the house, will give you an idea of the amount of rent you will need to charge per month to make the property a profitable investment.
2. Shop around for the best mortgage deal
If you are in a position where you need bank or building society support to finance your purchase, then it is a wise move to shop around for the best possible deal. Many professionals now advise the use of a specialist buy-to-let mortgage broker.
3. Buy a property in the most profitable area not just the most convenient!
Many people look for buy to let properties near their own home, primarily for convenience. The problem with this is that in some areas, demand for property is not as great as in others. While it is not practical to purchase a property that is a long distance away, especially if you intend to visit it regularly, it is worth looking around the local area to identify where demand for properties are highest and what the best possible market conditions are for buying a property at the lowest price.
4. Now you have the property, make it attractive to your potential tenant
Once you have purchased your property and made any basic health and safety and environmental improvements needed, you can then think about adding a few touches to make your rental property stand out from the others on offer to your potential clients.
It is important that you have a clear idea of who your potential client is likely to be, so that you can make your property an attractive option for them. Students, for example, have a different set of needs and expectations to a professional couple with a young family, or an older person living alone.
Identifying these different needs and expectations and tailoring your property to suit them, can prove to be a wise move.
5. Do not skimp on insurance
Many buy to let owners assume that their property is covered by their existing insurance cover. Generally, this is not the case and there is a real need to ensure that your property is well insured with an adequate level of home cover to protect your investment.
6. Consider using an agent to help with the day-to-day running of the property
If you are busy, then it is wise to consider using an agent to help with the general running of the property. Agents do charge a fee, which again needs to be factored into your budget, but this also means that they will help with emergency repair problems should there be a problem at the property, with the plumbing or electrics for example.
It is important not to be fooled into thinking buying to let is a simple and easy way to make money. A buy to let property is not a guarantee of a quick return on your investment, but a long-term way to help grow your finances, if you manage your property and tenants in a correct and professional way.
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