A lot of people on the housing market may look at the buy-to-let option and may think that is a sure investment that will make you money. But there are certain factors that need to be looked out for before deciding to go ahead with buying-to-let a property. The next 3 articles will run you through ten useful tips that will help you decide whether buying-to-let a property will be a worthwhile investment for you. This article will cover the first 4 tips, with the 2 corresponding articles featuring three more tips for you to consider.
Tip Number 1 – Researching the Market
The first thing to consider before going ahead with buying a property to let is you need to research the market. This is even more important if you are new to the buy-to-let market. You should ensure that you are sure of the potential risks that go with the buy-to-let market as well as the possible benefits. It could be useful if you know someone that has previous experience in buying-to-let to ask them as many questions as you can so you can gain a better understanding of the market.
You also need to be certain that this is the type of investment you want. Make sure that you have researched other investment options thoroughly and then you can make a better educated decision on whether buy-to-let is right for you.
Tip Number 2 – Consider the area
The second thing you need to consider is the area of the property you are looking to let out. It isn’t always the most expensive area that would be the most likely place that people would want to live. The most promising areas could also depend on factors such as transport and schools.
People who are looking to rent a property will want their lives to be made as easy for themselves as possible. So this means that whether the area you are buying to rent a property has good schools for young families or whether the area has effective public transport will have more bearing on whether people would be likely to want to rent the property you have purchased.
Tip Number 3 – Make sure you know all of the costs involved
The third factor to consider is to make sure you know all of the costs that will be involved in the buy-to-let process. Before going ahead with the purchase sit down and work out all of the costs that will be involved with the property and work out how much rent you will be likely to receive.
When going over the costs, ensure you look at the mortgage repayments that there would be with the property. You would usually want the rent that you will be getting to cover 125% of the mortgage repayments to ensure that the investment would be worthwhile.
You should be very clinical in your judgement once you have worked out the mortgage rates and the rent you would be likely to get. Consider some extenuating circumstances that may occur as well. For example would you be able to still survive if the property has no current tenants staying there for a couple of months.
Tip Number 4 – Make sure you get the best mortgage possible
The final factor to consider in this first part is to make sure you go around different mortgage lenders before asking for a mortgage. Don’t just go into the first bank you come across and sign up for their mortgage.
Make sure you shop around numerous different mortgage lenders and check out all of their different rates of repayments and interest. Also look at previous years rates of different mortgage providers to see if the rates are likely to change to get an idea to see which lenders are consistent.
Consider using a specialist buy-to-let mortgage provider as well as they will be able to give you more detailed advice that will specifically relate to you. Don’t be afraid to ask for advice as well, as even though you may have asked a provider for advice you are under no obligation to agree to their mortgage.
Video of a discussion of buying properties to let
See part 2 of the article [here….]
For further information on property buying and selling, then you can contact Private Property Buyer here http://www.privatepropertybuyer.net/
