The Landlord Magazine | Page 35

MY TEN USEFUL TIPS & ADVICES FOR NEW LANDLORDS EAR S Y EW REND N WT NE In these times of low rates and stock market unpredictability, property may seem an attractive income investment to many. The investment prospects of buy-to-let properties have witnessed a revival in the UK in recent times. However, if you are considering investing your money in a buy-tolet property, make sure to do it carefully. 1.Research the property market Investing in buy-to-let properties involves tying thousands of pounds to a property and, in general, taking out a mortgage. A subsequent rise in house prices may translate the investment into big leveraged gains beyond your mortgage debt, but in case house prices fall, your deposit may get hit while the debt remains the same. In terms of income and capital gains, property investments have yielded generous returns for many investors. However, it is crucial that you stay well informed about the market, property trends and the potential advantages and disadvantages of investing in buy-to-lets before you take the plunge. Your knowledge and research will land you in a better position of gaining higher returns out of your investment. 2.Choose a promising location A promising area does not have to the most elite or the cheapest are. Choose an idyllic location that potential tenants or buyers seek. Look out for the transportation facilities, schools, markets, and security in the area. For an ideal buy-to-let investment, match your budget with areas that would appeal to people you would want to let your property to. 3.Establish a budget Before you start looking around, it is essential that you do the math. You need to have an estimate of the cost of houses you are seeking, the mortgage repayments, and the rental income you will be hoping for. A general rule of thumb suggests that buy-to-let lenders typically aim to recover 125% of the mortgage repayments from rents.