Buy To Let
In fact some people have suggested the ever increasing house prices until the last couple of years that put a lot of property out of the reach of first time buyers was caused by the acceleration in people buying up property to let out, keeping prices high as more and more property was purchased on this basis therefore keeping demand for property high with supply lower than it might otherwise have been.
If you do get into buy to let, then what should you consider?
Well the first point is also the hardest: choose the right property. It sounds obvious, but some people who set their minds on getting into the buy-to-let market are so keen to get a property that they will lower their standards and settle for a sub-optimal property. It is much better to be patient and to wait for the right property than to dive in at the deep end.
When buying to let, remember that you will need to have tenants, and whilst it sounds obvious, potential tenants will no doubt check out several properties, and will want to live in a nice place. This means that location is just as important, if not even more so, with buy to let purchases than any other.
If you know the area then all well and good, but if not then it is essential that you befriend a local agent to get an idea of what demand is like in various areas, where demand is constant / going up / going down, together with what sort of rent can be charged for each type of house in each area. This information will give you the most essential figure: the potential yield on the property in an area where you can be quite confident of high occupancy levels.
As with any property purchase, you will also need to consider the mortgage carefully unless you are lucky enough not to need one. There are various options out there, but they will want to know what the yield is going to be, as they often insist that the mortgage payments are over-covered by the monthly yield - typically by around 125%.
So, choosing the right property and getting the right mortgage are two important points of a buy to let mortgage. There are also many others, check out the buy to let mortgage section for more details on buy to let.
More property related articles:
- Agricultural Mortgages
- Offset Mortgage
- Property Purchasing in Spain
- Making an offer on overseas property
- Looking after a let property