Buy-to-let has become a very popular investment avenue for many people. It’s a good first step if you’re looking to make your millions from property investing. We’re currently in a time of low interest rates, which are great for home buyers and investors. However, what goes up must come down, so if you’re seriously considering investing in property, now is the time! Unfortunately, it’s not all good news. Recent tax changes have affected buy-to-let properties, but there is still money to be made. So take a look at our tops tips for first-time buy-to-let investors.
Research the market
Before you start looking for potential properties, you first need to make sure that you understand the buy-to-let market and that it’s the right investment choice for you. Whilst there are many benefits to buy-to-lets, there are also risks. So understanding these risks, as well as the benefits, is essential. We recommend speaking to an experienced investor, or estate agent for some advice. There’s also an ocean of information available online for property investors: the Residential Landlords Association and the National Landlords Association offer a variety of information and advice for landlords.
Understand the maths
Before you start looking for an investment property, first, take a look at how much you want to spend on the property and the rent you’re likely to get from it. You will likely need a mortgage and most lenders will want the rent to cover 125% of the mortgage repayments and many will ask for a 25% deposit. Also factor in potential maintenance costs, and the costs of possibly using a letting agency.
Understand the property options and target market
Your budget will largely affect the type of property you’re looking to purchase. However, when purchasing a buy-to-let, there may be more options than you first think. It’s also important to think about the kind of people who will be renting from you. Two bedroom houses and flats are a popular option for investors as they have lower maintenance costs and are often tenanted by young, professional adults, who rent why they save to buy. If you’re targeting students, look for somewhere that is clean, comfortable, manageable, and close to the local university.
Research the area
The location of a buy-to-let property is one of the most important factors when deciding which property to buy. First, look at the property prices in various areas and how they’ve changed in recent times. Again, think about the types of people who will be renting from you and their needs. Does the location have good transport links? Is it near to the local university? What amenities are in the area? Also, think about your needs. Like, is the property close to where you live? How much work will need doing to the property? Are you able to do this yourself or will you need to hire someone?
Balance capital growth and rental income
Many first-time investors rely too heavily on rising property prices. Whilst this can definitely increase your profit when you come to sell, this won’t help you in the short-term. Therefore, the rental income of the property should be your primary money-maker. You should be gaining enough from the rent to provide a nice income and protection from rising interest rates and market fluctuations.
If you’re looking for a property to invest in, get in touch with Norfolk Property Online and see what we have available. Like this 6 bedroom semi-detached property on Ranworth Road in Norwich, perfect for students. You can reach us on 01603 300900 or by email: [email protected]
Recent Comments