9 March 2020
BUY-TO-LET properties have become a very popular form of investment over the last two decades and the trend is set to continue as mortgage lenders develop new products dedicated to the buy-to-let market.
Providing that you have an adequate deposit to put down, or adequate equity in your main home, buy-to-let remains an excellent long term investment, providing local income and capital growth despite fluctuations in the property market.
Landlord Today recently published their top tips for buy-to-let investors which included,
1. Know the law
2. Prepare for costs
3. Evaluate tenants
4. Understand eviction
5. Prepare your lease
6. Start small
7. Don't stress about it
Linley & Simpson have specialised in lettings for over two decades and we have dedicated teams to manage all aspects of the property once you are ready to let, and through our fully managed service we are able to take care of the 7 points above. Where you can really take advantage of our expertise is in the buying process. We can give you insights into the market and provide you with all the information you need when making an investment, but here are some of our top tips.
1. The key to success with buy-to-let is not to buy with your heart, but to buy with your head. Make sure you choose a property that is in demand in the area and not necessarily one that you would want to live in yourself.
2. Tenant demand is strong and looks set to continue to grow as first time buyers are buying much later in life and still struggle to raise deposits in many cases. Attitudes to renting have changed and it is now seen as a perfectly acceptable alternative to home ownership.
3. Decide your investment objectives by being clear about what you can afford and what you want to achieve. If you're investing for retirement, your main objectives may be capital growth. If you're investing to boost your income, the rent you earn may be more important.
4. Make sure you seek professional financial advice. Linley & Simpson can provide tax and mortgage advice through independent finance sector specialists who - without obligation - will discuss with you the ways of achieving the desired mix of rental income and capital growth.
5. When choosing a property, you need to choose one that will appeal to the type of people who live in that area. For example, the main tenant market could be made up of busy professionals, single people or couples who may be looking for; a two or three-bedroom flat or house, good transport links and small or no garden
6. Strategically decide where to buy. Some landlords feel reassured by only buying in areas that they know well whilst others are simply not interested in the geography, only in the financial return. Both approaches can work out well if you're open to our advice. We won't claim to be able to predict every new hotspot but we can certainly tell you where major developers are active, where other investors are buying and where major new transport links or facilities are planned.
7. Both approaches can work out well if you're open to our advice. We won't claim to be able to predict every new hotspot but we can certainly tell you where major developers are active, where other investors are buying and where major new transport links or facilities are planned.
Whilst a buy-to-let property can make you money, it also has the potential to lose you money if you don't do your research or the market experiences a drastic change. Make sure you have contingencies in place so that you can afford drops in the property market, interest rate changes or vacant periods. You can insure against non-payers and we can recommend a provider.
If you would like further advice on investing in property, please contact your nearest branch. You can find our contact details here.