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.