Buying to let basically involves purchasing properties for the purpose of renting them out to people. This real estate investment practice has become quite popular, and for good reason. If you are interested in doing this, there are a number of things that you should know. You could end up making hundreds of thousands of pounds each year, but only if you take the right approach. It is never a good idea to get involved with this sort of things before you learn everything there is to know.
Do Enough Market Research
When you are just starting off the in the world of buy-to-let, you should make a point of doing as much market research as necessary. Look at each investment opportunity very closely to see if there is another property that you could get more out of. You should never choose to buy any type of property until you have looked at it from every angle. If you think you could do better with something else, you should move on.
Focus on the Location
It is also important to select properties that are in nice areas where people want to live. These properties tend to be more expensive, but they are usually good long-term investments. Look for areas where there are a lot of good schools, shopping, access to public transportation, and other things of that nature. Location is crucial when you are buying to let, so you need to consider this factor very carefully. You can buy a beautiful house, but it won’t earn you much of a profit if it’s in an undesirable area.
Getting the Cheapest Mortgages
Two-year fixed mortgages can offer you a cheap option that will allow you to save money while getting the investment property you want. Make sure that you stay aware of large fees with the mortgages you get though, as they can be overwhelming. A two-year fixed mortgage can come with over two thousand pounds in fees.
You will need to do some shopping around before you decide on a certain mortgage. Take the time to speak with some different lenders so you can find out what kind of interest rate you will get with each one. This research doesn’t that all that long, and it could save you thousands of pounds in the end. Also, consider hiring a professional broker so you can be sure that you’ll get the best possible mortgage.
Consider Your Ideal Tenants
When you are trying to make a decision on a property you wish to buy and rent out, you should consider the tenants you will be looking for. If you are planning to rent out to students, you should probably look places that are comfortable yet affordable. If young professionals are who you are after, maybe choose properties that are a bit higher-end and luxurious. You don’t want to choose any property that you’ll have a hard time getting the right tenants for.
Don’t get carried away with Your Greed
There is nothing wrong with wanting to make money from the properties you buy (it’s the whole point), but don’t get too greedy. You should instead focus on the long-term investment that you have made. You will have a difficult time keeping tenants if you charge too much. When you charge a reasonable amount, you will have a steady income for the long term.
Factor in the Maintenance
When you are trying to determine whether or not you should buy a property to rent out, you need to consider the maintenance. How much work does the property you are look into buying need done? It might not be worth it, depending on how old the property is. The older it is, the more money you will have to spend on upkeep over time. Newer properties cost more, but they also mean less maintenance in the long term.
Don’t Forget to Haggle
You should never accept any offer on any property before at least trying to do some haggling. Negotiation is a big part of the game, so you should get used to it. There is a very good chance that you can get the price down quite a bit if you are willing to negotiate a bit with the seller. It is a good idea to be fairly flexible so you don’t let your pride get in the way of a great overall deal.
Buying to let can be a wonderful type of investment, but there are many things to consider before getting started. When you actually do your research, you will be able to get a good deal on quality properties that you can make a lot of money on over the years. This is an excellent long-term investment, and it does require some measure of patience.