When investing in property, there are so many factors to think about to ensure that your buy-to-let venture is a success. Whether you are an experienced landlord, or letting a property for the first time, here are eight manageable steps to help you off to a flying start:
Target the Tenants
By choosing your tenant demographic before
buying a property, you’ll find a property and an area to fit into, and what kind of property.
One Size Doesn’t Fit All
The majority of tenants want one or two-bedroom homes dependent on geography.
If you are becoming a landlord for the first time, or have a portfolio of only one or two properties, it makes sense to keep things simple by catering to this common need.
Experienced landlords can enjoy the benefits of HMOs, on the understanding that they are subject to more stringent legal and insurance requirements.
Stay Close to Work
Don’t buy a property just for your own benefit – this will be your tenants’ home. Therefore, play the statistics game. By purchasing a property close to, or in, an employment centre such as a university, hospital or city centre, you’ll be more able to attract tenants to your home.
But Avoid the Nightlife
If your tenants are going to be working in a town or city that has a recognised night life, simply compromise by finding a buy-to-let property on a public transport route, or at a ‘safe’ distance from the pubs, bars and clubs.
The Numbers Must Add Up
Get a mortgage, even if you can afford to buy the property with cash. You can benefit from tax breaks, plus many buy-to-let lenders offer favourable rates –after all, you’ll be guaranteed a rental income once you’re ready.
As long as your rental income is above 125pc of the mortgage repayments, you’ll usually find an interested lender.
Take Your Time
If you want to invest but fear your time scales will fall foul of the new 3pc Stamp Duty surcharge that goes live in April, there’s no need to worry.
House prices may well fall after the pre-April rush. Counterbalanced against the surcharge, prices charged may not be significantly higher than expected.
The younger your tenants, the more likely they will want a property furnished for them. This means sofas, tables and white goods. However, if you are targeting tenant families, be wary that they may already have their own furniture – so don’t spend money that contradicts the circumstances of your tenants.
Letting Agents can be Trusted
If you are experienced and know your way around the legal complications and requirements of being a landlord, then it makes sense to save the money.
You may be put off by the fees and rates a letting agent will charge, but you will benefit immeasurably from the expertise and management skills of an agent.
Also, some fees are tax deductible, so you can claim them back at the end of the tax year.
If your portfolio will benefit from a helping hand, please contact your local Whitegates branch