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  • Olivia Thomas

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.

  1. 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.


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ABOUT US

I hope you enjoy reading our blog and find it both informative and useful. These articles are designed for people who have an interest in the residential property market in and around the Alfreton and Ripley areas. 

 

We are a local, family run estate agency, passionate about property and our local area. 

 

If you have any questions regarding the information in these blogs, property investment, lettings or management please feel free to contact us.  We are always happy to help. 

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