Top tips for buy-to-let success
Buying to let has become a more common practice in recent years, encouraged by falling property rates and continuing demand from tenants. While this particular real estate bubble could be said to have burst compared to what could be achieved a few years ago, buy-to-let can still be a great way to earn money for those who can afford the investments and have more faith in physical assets than stocks and shares or their savings accounts.
The first step before making any investment is to research the market and make sure the time is right for property investment. You should find out all the risks involved to determine whether you can afford the potential consequences, and be confident that your money will be able to perform as you wish it to. If you know anyone who has achieved success with buy-to-let in the past, speaking to them about their experiences could offer valuable insights.
Once you've decided that property investment is right for you, it's time to start looking into specific properties, which begins by researching different areas. Because you are hoping to lease your property, it's important to choose an area that people would want to live in, and the type of tenants you wish to attract could also inform this decision. Are you looking for wealthy city workers or students on a budget for one-year leases in a cheaper property?
When calculating how much you're likely to make from these investments, you should factor in all associated costs, from tax to repairs needed to bring the house or flat up to rental standard and landlord insurance covering the property against damage. If the property does need repairs, doing these yourself could save you the cost of hiring tradesmen. Landlords typically try to make 125 per cent on their mortgage payments when calculating rental rates, but this has been harder to achieve since the market slump. You might consider charging a 15 per cent deposit instead, to offer some level of financial protection.
Buy-to-let is a long term approach to investment that may take a number of years to yield results, and you should think about potential future changes in the markets when deciding whether or not to make these investments. If you have been buying to let for several years already, you should now be able to benefit from lower rates than previously, thanks to the reduction in the base rate.
Bgiles - About Author:
Bruce Giles landlord insurance writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
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