Buying a Property To Let
Some things you might want to consider before investing in property.
You might tie your money up for a period of time
Understand that property prices like any investment can go down as well as up
Understand and accept the additional risks that are associated with borrowing money to buy a property
Understand and accept the time and costs involved in owning and running a property
You now to have to pay an additional 3% on top of each Stamp Duty band when you buy an additional home or a residential buy-to-let property
Buy-to-let investment is very different from simply owning your own home. It can be lucrative and enjoyable when you become a landlord, you’re effectively running a small business - but one with important legal responsibilities. Always seek the advice of a local letting agent to fully understand the legal implications of letting a property.
How do I buy a rental property?
To buy a rental property, you can use your own money or take out a buy-to-let mortgage with a deposit. Keep in mind that a mortgage comes with risks. Once you buy a property, you can potentially earn a profit in two ways
RENTAL YIELD - What your tenant(s) pay in rent, minus any purchase, maintenance and running costs, such as repairs and agent’s fees
CAPITAL GROWTH - the profit you earn if you sell your property for more than you paid for it
Your agent may run a Buy-to-Let advisory service or you can contact a financial advisor to help you to work out your return.
Choosing the right rental property can make a big difference to the return you might achieve. Here are a few things to look out for when buying a rental property.
Is it a good rental area? e.g. close to local amenities, bus routes or railway stations, near to good transport links or good schools.
2. What do similar rental properties rent for in the area?
3. What percentage have property prices risen in the area over the past 5 years?
4. Will the property sell easily when you decide to sell in the future? e.g.. can the property be extended, is there off road parking etc?
5. Will the property need much refurbishment which could affect your initial expenses/budget?
As I always say in my newsletters, please seek the correct financial advice from a reputable financial advisor or accountant before embarking on any property purchase there are great local companies who can provide this advice for you.