Check out our top ten tips.
1. Pick your property carefully
Don’t just choose a house you like the look of – talk to local letting agencies and make sure the market is busy and buoyant. Think about the maintenance required: you’ll be responsible for it, so make sure you give yourself an easy life!
2. Choose your mortgage
Fixed rate, interest only, lifetime tracker, 70% LTV, 80% LTV – with all the options available in the marketplace, you could easily get confused about which one is best for you. But don’t worry – we can help you find a deal that suits you perfectly, and we have access to a wide range of additional products.
3. Work out what you can afford
We will help you choose a mortgage where the repayments balance with the rental income you can expect. And it’s also a good idea to make sure there is some ‘slack’ in your calculations, just in case interest rates increase sharply, or your property is empty for a period of time.
4. Don’t forget the legal costs
With every property purchase, there are additional costs which you need to reckon into your calculations: solicitors fees, Stamp Duty, insurance and in some cases ground rent and service charges. We’ll be glad to help you work out what’s needed.
5. Check out the Health and Safety regulations
As a landlord, you will have to meet the relevant Health and Safety regulations. You may have to install fire doors and smoke detectors, all of which costs money of course. It’s well worth downloading the DTI’s guide: Furniture and Furnishings Fire & Safety Regulations, available at dti.gov.uk
6. Think about appointing a letting agency
Finding tenants, collecting deposits and rent, arranging tenant agreements and inventories can take up a lot of time and energy – so you might prefer to appoint a professional letting agency to take care of it all for you.
7. Make sure you’ve got the right insurance
You’re responsible for insuring the structure of the property, and some insurance policies don’t cover ‘buy to let’, so you’ll need to be careful in your choice – this is another area we can help you with. You might even want to protect your payments from your tenant; we can help provide cover against losing rent should they default on their payments.
8. Establish your tax position
You’ll be liable for tax on your rental income, and for Capital Gains Tax if you sell your buy-to-let property, so you should talk to your accountant about the implications of your purchase.
9. Remember, this is a long-term investment
Buy-to-let is a medium to long-term – producing returns 5 to 10 years at the very least. So if you’re looking for a quick money-spinner, it’s not a good choice! As with most property investments the longer you own it, the more you can expect to earn.
10. Get some helpful advice!
Going into the buy-to-let market is a major investment – and we can offer you plenty of expert advice that could help avoid any potential problems or headaches. We’ve got a wealth of experience and we can find you a deal that’s just right for you. So let’s talk!
Call us to speak to an adviser.
Your property may be repossessed if you do not keep up repayments on your mortgage.
You can choose how we are paid for mortgages; pay a fee, usually 0.5% of the loan amount or we can accept commission from the lender. In addition to this we will charge a £325.00 administration fee once a mortgage offer has been secured.
The Financial Conduct Authority (FCA) does not regulate some forms of buy-to-lets.