What You Need to Know About Buying to Let

As rents are rising and mortgage deals are improving, many people are feeling the itch to climb to the next rung of the property ladder and make an investment in a buy-to-let property.

Buying to let is undoubtedly an excellent medium- to long-term investment as a means of earning extra income or setting yourself up for a comfortable retirement if you choose to sell your property later on to supplement your pension.

Letting out a second property can also strengthen your credit rating, and purchasing a buy-to-let property is often considered a means of investing in something tangible and secure rather than stocks and bonds.

However, buying a property as an investment isn’t something to be done blindly or without carefully considering all of the associated risks; uninformed prospective buyers stand to lose a lot of money and possibly their property without the proper guidance.

First, when setting your budget and making the commitment to purchase a buy-to-let property, give due consideration to some key factors:

  • Consider whether you can afford to cover the mortgage if you cannot secure a rental for a given period, and carefully analyse the market trends for rentals in the area where your prospective property is located to ascertain the risk of being stuck without tenants.
  • What will the rental yield be? Consider maintenance and running costs to determine how much of a profit you could gain from renting the property.
  • Don’t forget to include solicitor’s fees, survey fees and land duty stamp tax when working out your budget, along with any other agency fees; these easily forgotten factors can have a huge impact on your price range.

As with any investment, buying to let will always involve a certain degree of risk; the only way to know you’re making the smartest possible property investment is to go to trusted, experienced mortgage advisers to help guide you through every step of the process. Below are a few of Homeline Mortgage’s tips on how to achieve buy-to-let success:

  • Broaden your buy-to-let property search beyond your immediate environs; by simply extending your search you could find brilliant opportunities for much higher rentals.
  • Particularly if you’re just getting onto the property ladder, purchasing more ‘lettable’ homes like one- or two-bedroom flats is a great way to secure rentals easily and start making a profit from your investment.
  • Remember the old cliché: location, location, location. You’ll be able to get the best return on your investment when you purchase a property in a central or highly-coveted location, as many tenants are happy to pay higher rents for convenience and accessibility.

At Homeline Mortgage, our expert Mortgage Advisers can give you the guidance and support you need when analysing a property’s risk profile, and when sourcing a lender who can offer the right mortgage for you and your budget.

Contact us today for more helpful advice on buying to let, remortgaging your home, or buying your very first property.