Monday, 8 July 2013

What To Consider When Finding Your First Buy-to-Let Property

What To Consider When Finding Your First Buy-to-Let Property

So, you’ve decided you want to make the leap into buy-to-let investment.  Now comes the hard work – including finding the perfect property with which to begin your career as a landlord. Read our tips to find out what to bear in mind when choosing a potential rental.

1) Consider demand and target markets
Don’t just go for the cheapest property you can find. As an investor, you need to make your money work as hard for you as possible, so do your research and identify the areas where rental homes are in demand. It’s likely these parts of town will be well connected to road, rail and bus transport links and have a good range of local shops.

Also, don’t forget that different tenants will have different requirements. Students will want to live somewhere cheap and close to public transport that goes to their university, and will favour houses and flats with a few bedrooms so they can share the rent, while families are likely to prefer a quiet, low-crime area with good schools and decent gardens.

A good way to find out where’s best to buy is to speak us QBGROUP

2) Be specific with property features
As well as knowing your market, you should also know exactly what kind of property you want to buy. For example, if you’re looking to let to families, you’ll probably want to search for houses with at least three bedrooms, a good-sized kitchen and a large enough bathroom. You’ll also need to decide whether you’re prepared to do any renovation work.

This will help save time by narrowing your search and enabling you to go straight to estate agents with your requirements, so you only end up viewing the properties that you’re most likely to buy. This will also convey a professional image to agents, making them more willing to cooperate and speed things up.

Once you’ve decided on a property you want to buy, be sure to acquire as much information about it as possible, including its potential resale value once any renovation work has been factored in. Even if you intend to stay in the buy-to-let business for a while, the market and your own circumstances can change at any point, so it pays to think about these things in advance.

3) Know your budget – and stick to it
This might seem like a simple piece of advice, but it’s easy to get carried away and end up spending much more than you originally intended. Speak to a buy-to-let mortgage adviser about how much you’re likely to be able to borrow, and factor in costs such as legal fees and landlord-specific paperwork, as well as buildings insurance (you can find appropriate cover through companies such as Landlord Insurance.

Once you’ve chosen a property you want to buy, be sure you know what the likely rental income will be and weigh this up against your mortgage repayments. Also, if you decide to use a lettings agent to help you market and tenant your property, you will need to pay them a percentage fee, which is typically taken annually.

While this might seem like a downside, a lettings agency can be particularly useful to first-time landlords in taking care of the various tasks associated with renting out and maintaining a buy-to-let property, including many things that you’re unlikely to have already thought of.

Jonathan Robinson
QB Lettings & Management Co

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