Buying a second property is very different from simply buying a home for you and your family. If you’re thinking about buying a property to let, you need to understand that this is a very different process with a very different set of possible results. Buying to let is a business venture, and should be undertaken with a lot of enthusiasm and research behind it. That being said, there are many benefits to going down the buy to let route if you know how to go about it.
Why buy to let?
Buy to let is an attractive income investment for those looking to make money on their terms, such as individuals with their own business or those entering retirement. It’s also popular for those who have already begun building up an impressive property portfolio.
Previously, people were put off buy to let investment because of the money needed to raise a big enough deposit on a property. However, residential bridging loans provide the necessary funds quickly so you don’t miss out on a potential investment. These are available from lenders like Glenhawk.
The property market is bouncing back, which is encouraging more people to snap up buy to let opportunities. However, you need to be aware of changes to the process. For example, recent changes to stamp duty laws should be accounted for in any calculations you make regarding a potential investment.
Yet despite these changes, buy to let remains popular and potentially very successful. Greater demands from tenants go hand in hand with rising rental rates, and property investment is generally seen as more secure than investing in stocks and shares.
Here are a few tips to make sure your venture into the world of buy to let is a successful one.
Research the market
As we’ve already touched upon, you’ll need to know the current market extremely well whenever you decide to seek out a potential property investment. If prices are set to rise, now might be the perfect time, but if they are set to fall you could be entering a very risky situation.
Choose the right area
Buying a property which you can let out to tenants is all about location. The best area needs to be one of the first decisions you make, and it is not an easy one. The right location is a balancing act of picking somewhere which is reasonably close to your location (so that you can access the property easily and quickly in case of emergency) and finding somewhere with good market prospects and lots of interests.
Budget and shop around
Do the maths when investing in property, and aim to take all possible excess costs into account. This will stop you coming up against any surprising extra payments which you hadn’t accounted for. You should also shop around a lot before making a firm investment, as there is always the chance that an even better investment is just around the corner. Don’t simply invest just because you like the property, or because it is affordable. Take factors like location, budget, rental rates and local interest into account.
Decide who is your perfect tenant
Once you’ve decided on a property and managed to secure it, your next big challenge will be finding tenants. You don’t want to invest in a great property only to be stuck with unreliable tenants who cause damage and don’t pay their rent on time, so develop a strong screening process in order to find the right tenants for your property.