Things To Look For When Buying A Buy To Let Property

When purchasing a buy to let property as an investment, the main consideration should be where to invest. Bargain properties come up in all sorts of towns and cities, depending on their state and proximity to amenities. Purchasing a buy to let property because it is cheap does not necessarily herald a wise investment.

Always, always research the area you are interested in. Look into the local amenities. Are there good, local schools and colleges that carry good reputations? Particularly if you are looking at a buy to let property that is suitable for a family, you need to consider the local area from the perspective of children.

Open areas of parkland or greenery are always a bonus for families as well as the good schools. Ensure there are suitable choices for doctors and dentists, maybe if you think you would let to working parents, check out childcare facilities. These are all time consuming searches but make a worthwhile advertising tool for your buy to let property.

It won’t be too difficult to search the area around your buy to let property for signs of re-generation. Run down areas will offer up cheap houses but check out planning permission listings. Building sites are never pretty but it will show that money is being ploughed into the area, giving hints about what is expected for the areas future.

Culture issues are an important attraction if you are targeting a particular market. Look for theatres, cinemas, clubs, groups, exhibition centres and the like. All these will make your buy to let property an attractive option.

Decent shopping centres are essential for all groups of people. Choice is something that most people are demanding these days and small local shops as well as large, glossy department stores and shopping centres are the order of the day.

For the smaller buy to let property where you might target the single person, look for homes that are just outside of a large town but on a commuter line. The rents will be more affordable than in town so more attractive to workers.

When carrying out your research on the local area, don’t omit to check out average local rents on similar size properties. You need to be competitive and not overprice yourself or appear too cheap, as this will attract the wrong type of tenant.

When considering the rent you intend to charge, take into account ALL of your outgoings. Not just mortgage rates but allowances for fluctuations in mortgage rates. Also consider any taxes and insurances on the property.

It is essential to make sure there are enough funds to not only get the property into a letable state but to uphold the maintenance that you will be liable for. To reduce any risk of the property falling into bad disrepair, it is a good idea to employ an agent to look after the property, particularly if you are not living near enough to keep a regular check on it.

It is always a good idea to leave yourself with a contingency fund. Set aside enough money for the possibility of the property sitting empty for two months of the year. This will cover any blips in rent and give you some breathing space.

Buy to let properties can be a good investment but not for the first timer without advice. Always seek advice from seasoned landlords and research and know your area and target tenants.

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Is Buy To Let Property Still A Good Investment

With the ever-increasing difficulty of securing a mortgage it is no wonder that so many are turning to renting accommodation as a way of keeping a roof over their heads. However, such high demand has pushed rents through an impossibly high ceiling, seeing the monthly rate at over 1,000 pounds for the first time. This is a twelve per cent rise in the last six months and the trend is likely to continue.

A third of landlords say that demand is high and the buy to let property market remains strong with the average home at just under 200,000, pounds an increase of eleven per cent since March 2007. This is all very well if you can afford the mortgage in the first place and have not recently invested in a buy to let property in the hope of making a quick buck. It also means that you need to be able to cover mortgage payments for at least six months if your tenants should have a problem paying their rent or the property remains empty due to high rental prices.

The UK’s biggest buy to let property mortgage lender, Bradford and Bingley, have themselves been experiencing problems of late. It has announced to its investors that the number of mortgages in arrears has jumped and is likely to continue in the same vein, although the buy to let property mortgages accounted for only one per cent of their total loans. Bradford and Bingley have seen a drop in their share value by twenty six per cent and this has prompted an injection of help from the government, although they are keen to stress they are not experiencing the same problems as Northern Rock.

Savers with Bradford and Bingley are being urged not to panic as their money is protected to the tune of 35,000 pounds per customer by the Financial Services Authority and they are keen to carry on business as usual. Buy to let property mortgages are still available and the bank will continue as before.

Buy to let mortgages have increased dramatically over the last ten years due to the difficulty of being able to get on the property ladder and more people looking to renting. However, since then, mortgage rates have gone up and some people are struggling to meet the repayments despite the rise in rents. Those borrowing to purchase buy to let property have decreased in recent times due to the risky property market but if you can comfortably afford it then it is still a good investment.

The demand for more property could, in part, be due to the influx of migrants into the UK who are all looking for accommodation without mortgages. It is expected that the UK population will grow by a further 4.4 million in the next eight years and will grow to a staggering 71 million in the next twenty years. All these people will need rented accommodation in one form or another so if you can afford a property to let, then it is still a wise investment.

Government estimates put the figures at five million new homes that will be needed in Britain over the next twenty years and one and a half million of those will be due to overseas immigrants. This is sure to put pressure on those in the UK already needing accommodation and as such, now is a good time to purchase a buy to let property if finances allow.

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In Demand: Buy to Let Properties

Copyright (c) 2008 Parmdeep Vadesha

Despite the looming economic uncertainty and the rise in housing prices, 2008 ushers in a high demand for buy to let properties in the United Kingdom. As houses become continuously more expensive to home buyers, many would opt to rent rather than to purchase their homes at this time. Many new families or first time home buyers are feeling the housing crunch, and would rather rent in the meantime while they save money to buy. This, however, heralds in good news for the buy-to-let investor, as demand for rental properties increase.

Though some economists express concerns about the global property market and rise in inflation rates, buy to let investors are not fazed. Many of those investing in buy to let are using the high housing prices to their advantage, and finding ways to benefit in the marketplace. For many first time buyers, it is quite difficult to break into the property market and buy their first home because of the high level of upfront cash deposit needed upon purchase. This is why many would rather rent than buy.

The buy to let market is thus a viable investment that offers the prospects of very attractive yields. Purchasing a property and then letting it out is a secure and profitable medium to long-term investment. However, the key to a successful buy to let investment is two-fold: the right property and the right tenant. As with all property investments, the trick is always with the location. Find the right property in the right area. More importantly, choose a property in an area where there is a good chance of securing a long-term tenant. A good tenant of this kind is someone who has a steady source of income, but not rich enough to purchase a house of his own. Finding this kind of tenant is indeed a jackpot for the buy to let landlord, as he would have consistent rental income to pay off his mortgage on the property and make a profit.

Though it is usually wise for a landlord to manage his buy to let property portfolio on his own, the use of a letting agent is also a good idea. Letting agents are especially useful for legal questions, as they can provide expert advice and find ways to prevent the landlord from getting into difficulties should there be conflicts with his tenant.

On a final note, one key aspect that a landlord should consider is rent. Especially for properties located in prime and popular areas, landlords are often tempted to ask for a very high rental price. Especially when there is a high demand for the property, increasing the rent is a good idea. However, it is wise to do this in between tenants. If the property has been rented out for years by the same tenant, a sharp increase in price would not necessarily be a wise move. Put a premium on loyalty and on cultivating long-term relationship. Most especially if the tenant is an unproblematic one, it would be best to charge a sensible rental.

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