Buy to let Property
If you are looking to get started in the Buy to let property market, it is advisable to conduct a careful thought out market research before you decide to buy a property to rent out and take on a prudent approach to the amount you will want to spend for your property purchase.
Generally speaking, investing in property is usually a good investment, but there have been periods when buy to let landlords have struggled to make a their profit due to changes to legislation or interest rates or the unexpected decline of the area where they bought.
If you choose to appoint an estate agent to manage your property letting, then be sure to select an agent one who is a member of a professional association, such as the ARLA, the National Approved Letting Scheme (NALS) or the UK Association of Letting Agents (UKALA) Further tips on appointing a property estate agent, including the legal relationship, rights and responsibilities, can be found on many websites on the Internet. Do your research to ensure that you find an agent with whom you can build a long term relationship to help you let your properties quickly and efficiently.
A lot of landlords choose to manage their buy to let property investment themselves and are happy to take on the responsibility of finding tenants, checking their references, organising rent payments, carrying out inspections, maintaining the property and insuring against damage. If you are planning to manage your own property then have a think about becoming a member of professional associations such as the National Landlords Association (NLA) or the Residential Landlords Association (RLA), which can provide legal advice, help lines and standard documentation such as tenancy agreements and tenants' notices to quit.
Financing for buy to let properties can be obtained from many lenders who provide specialist buy-to-let mortgages, as well as mortgage brokers who seek out the best deal for buyers. Most lenders expect you to charge rent to cover 125% of the mortgage repayments, and will require a 15% deposit to protect against falling prices. Although mortgages of 85% loan to value are the norm, some lenders sometimes offer 90% loan to value deals. Some lenders are less stringent about these conditions when interest rates are higher.
When you are managing properties, you will sometimes get into situations where there will be differences of opinion from time to time between you and your tenants. You should have good negotiation skills and a responsive attitude to reasonable requests. It is also advisable to distance yourself emotionally from the properties you buy.
The Council of Mortgage Lenders (CML) produces two guides for people considering buy-to-let, which aim to summarise the practical considerations involved which can be found from the Internet. They can be downloaded at cml.org.uk/cml/consumers/guides/buytolet