Putting your money in bricks and mortar is the ambition of many people. The idea of investing in a buy-to-let is also appealing. The rent can pay off the mortgage and provide an income, while the building itself will go up in value. Here are six tips to consider when investing in buy-to-let properties.
Location, location, location
Look at your finances to see what type of property you can afford and in which locations. London and its commuter belts may seem like prime investment areas because of the high demand for rentals, but properties are expensive and the rental yields are not the hottest. Look at university towns further afield, such as Manchester or Liverpool, or check out up-and-coming areas that are ripe for investment. You could also buy a run-down property to fix up, which will immediately add value to your investment.
Do your research
After you’ve chosen your location, you need to find out what properties are popular and what type of people live there. Once you know this, you can see whether it is best to invest in quality apartments for professionals or houses for students and families. Look at the average rents and yields; you need to ensure it is viable and profitable.
Tax and financial costs
Take into account that you will have to pay stamp duty on your buy-to-lets and the fact that mortgage relief is being phased out for landlords.
Your ideal tenant
Keep your preferred tenants in mind when decorating or furnishing a home. The fixtures and fittings should meet what your ideal tenant will like and need rather than your own taste.
Managing your rental property
Being a landlord is time-consuming. You need to market the property to find tenants, meet many legal requirements regarding contracts and safety certificates, collect rent and deal with any problems. Using a professional management firm means an expert will do all this for you. For information about Gloucester sales and lettings, contact someone like Alex Clark Glos now part of TGRES for information about their services.
You’ll need back-up funds in case something goes wrong. An appliance may break down or need replacing. There could be a leak or electrical fault. There might also be void periods between tenants. Make sure the finances are in place to deal with these issues.