Buy to Let

Property investment in the buy to let market can produce a good regular income. However, just having property to let is not enough. Careful buying, on-going maintenance and continuous occupation will be necessary because it is also easy to lose money in this area. So let’s have a look at some of the basics.

1. This should be looked at as a long term project. Especially with the first rental property there will probably be a time lag between obtaining a property and actually receiving any income. During this time you will inevitably be spending rather than receiving money.

2. Are you going to buy ready for tenants properties or will you go for the near derelict house which is cheap but needs a lot of work? Both have advantages and disadvantages. Obviously if work needs to be done it is best if you are qualified to undertake it or have various trades people lined up.

3. Where are you going to buy? Usually cheap houses equal low rents. Up market properties are usually quite expensive but produce high rents.

4. How much finance do you have available to invest? This needs to be divided between purchase of the property and any expenses which will be incurred before renting.

5. Find out where people want to live and how much they are willing to pay. Look in the local press and research at the offices of property sales and letting agents.

6. Where can you get the finance for your buy to let project? Shop around for the best deal. Remember you are out to make money not give it away. Read the small print.

7. Think about your future tenants. This will be partly dependent upon location and type of housing. Are you aiming for families, young professionals or students? You will need to arrange and decorate accordingly so forward planning is necessary.

8. How are you going to look after your properties? Of course, the simplest way to deal with this is to have them within easy reach of your own home. You can then be on call and also ready to check at any time. If your own area does not lend itself to the type of buy to let properties you wish to target then look further afield. In this case, however, you may wish to hire a letting agents to look after all the day to day running of the properties.

9. Think about all the drawbacks before embarking upon your buy to let business.

a. Property prices can go down as well as up

b. It may cost more than your estimates to prepare premises for renting

c. It may stand empty for a couple of months while you search for tenants

d. Maintenance bills may work out higher than you have bargained for.

10. How involved do you want to be? If you intend to be very hands on you may save money. You may, however, be interested in some aspects but not others. Any jobs can be covered by people well qualified to do them. You must work out the cost of this outsourcing to make sure that it will be covered in your pricing.

You should view your buy to let business as a long term investment. However, get it right and you will produce a good, steady income for the future – for you and your heirs.

Retire To Something

Be Sociable, Share!