Buy-To-Let For Beginners
If you are looking to invest
in a property to rent out, then it is important that you do some basic research
into whether it is an investment that would be suitable for you or not.
Although there is a good chance you will get a return on your investment in the
long term, being a landlord will incur certain expenses that you will need to
budget for. There are also some practical as well as financial considerations
that you will need to make. With this in mind, let’s take a look at some of
them here:
Decide what you are investing for
If you are looking at investing in property as a short-term investment to provide you with some additional income, then you should be looking at properties that will give you a high rental yield. If you want a more long-term investment, for example a property that you can sell to provide a retirement income, then you will ideally need a property that is going to sell for a lot more than you paid for it in a number of years time - as well as providing you with a rental income along the way.
Research the area and the other properties in it
Before you begin your property search you will need to do some research of the area in which you are considering making a purchase. Looking at the other properties that are available for rent in that area will give you a feel for what’s moving and what isn’t. This should give you some indication of whether the property you are interested in will be a good choice in terms of finding tenants easily, and whether you should expect to be renting to single people, couples or families.
Make sure you do the math
There are several financial considerations that you will need to think about when deciding whether a buy-to-let property is the right type of investment for you. The rent that you receive each month should ideally be 125% of your mortgage payment, as this will also cover any additional expenses that you may face. Remember, you will be responsible for all maintenance costs that arise in the property, and for any repairs that are needed.
Are renovations worthwhile?
One way of making the most of your investment is to make some renovations to the property. This can make the property more attractive to tenants, as well as increasing the rental value that you will be able to charge. If you ever to come to sell the property, it can also raise the asking price. However, before you undergo any major renovations, it is worth finding out whether the investment you make will be returned through higher rents first.
Consider the safety of your tenants
It will be your responsibility to maintain the property and make sure that it is safe for your tenants to live in. This includes getting a gas safety check carried out on an annual basis to ensure that there are no problems with the gas supply or any of the appliances. It is also advisable that you fit smoke alarms and carbon monoxide detectors for the property. Any problems that are reported to you should be dealt with straight away.
While all of this may seem a great deal of effort, it is necessary to make sure that you get the most of your investment. The reward that you will get for this hard work is an investment that is more likely to give you a rate of return that you may not be able to find elsewhere. Finding a good letting agents in Newcastle will make the whole process much easier.
Decide what you are investing for
If you are looking at investing in property as a short-term investment to provide you with some additional income, then you should be looking at properties that will give you a high rental yield. If you want a more long-term investment, for example a property that you can sell to provide a retirement income, then you will ideally need a property that is going to sell for a lot more than you paid for it in a number of years time - as well as providing you with a rental income along the way.
Research the area and the other properties in it
Before you begin your property search you will need to do some research of the area in which you are considering making a purchase. Looking at the other properties that are available for rent in that area will give you a feel for what’s moving and what isn’t. This should give you some indication of whether the property you are interested in will be a good choice in terms of finding tenants easily, and whether you should expect to be renting to single people, couples or families.
Make sure you do the math
There are several financial considerations that you will need to think about when deciding whether a buy-to-let property is the right type of investment for you. The rent that you receive each month should ideally be 125% of your mortgage payment, as this will also cover any additional expenses that you may face. Remember, you will be responsible for all maintenance costs that arise in the property, and for any repairs that are needed.
Are renovations worthwhile?
One way of making the most of your investment is to make some renovations to the property. This can make the property more attractive to tenants, as well as increasing the rental value that you will be able to charge. If you ever to come to sell the property, it can also raise the asking price. However, before you undergo any major renovations, it is worth finding out whether the investment you make will be returned through higher rents first.
Consider the safety of your tenants
It will be your responsibility to maintain the property and make sure that it is safe for your tenants to live in. This includes getting a gas safety check carried out on an annual basis to ensure that there are no problems with the gas supply or any of the appliances. It is also advisable that you fit smoke alarms and carbon monoxide detectors for the property. Any problems that are reported to you should be dealt with straight away.
While all of this may seem a great deal of effort, it is necessary to make sure that you get the most of your investment. The reward that you will get for this hard work is an investment that is more likely to give you a rate of return that you may not be able to find elsewhere. Finding a good letting agents in Newcastle will make the whole process much easier.