Purchasing property with a view to renting remains a popular long-term investment. For many people, rental accommodation has the norm with most being unable to afford purchasing their own home outright. If you are in a position to buy a property then it is possible to receive good returns on your investment. However, if you are new to property investment there are a few things you should bear in mind before purchasing your first buy-to-let property.
1. Do your research
Buying a property is a massive financial step and should not be undertaken without doing the appropriate research. This means making sure you are aware of the pitfalls as well as the benefits of your investment. It can be helpful to talk to people who are experienced in buy-to-let investments whether this is a friend or your estate agent.
2. Choose your location
Location is an extremely important factor when choosing your buy-to-let property and, again, requires proper research. Your tenant can move out within a month’s notice so the amenities need to be suitable for their requirements. For example, if you are buying a family sized home, see if there are schools, parks and transport links nearby. Perhaps you are looking for a high-end Mayfair flat suitable for a professional. Wetherell Estate Agents, for example, were responsible for 25 percent of Mayfair sales in 2013 and would be able to provide information on the local amenities. So, have a chat with your estate agent to gather information on particular areas. It’s also worth seeing what the going rate of rent is in the area and which locations are the most popular.
3. Do your calculations
It’s important to do some number crunching before you take the plunge and buy your first rental property. The deposit usually required by buy-to-let lenders is around 15-30%. It’s also a good idea to have a back-up fund for when the property is not being let and for repairs.
4. Put yourself in the tenant’s shoes
It’s often easy to see yourself living in a property when you’re house hunting but remember, you are not the tenant. Think about whether your tenant is likely to be a student, a professional or a family. What facilities and local amenities will they need? For example, a student might require functional facilities and good transport links to campus and nightlife.
As a buy-to-let investor you are in a strong position because you have no chain. Many vendors are keen for their sale to go through quickly and smoothly so this can be a good bargaining tactic to help you achieve a discount.
About author :
Samon Bagons is a financial writer who has profound knowledge on the contemporary financial world. He loves to contribute his articles to various financial communities, websites and blogs so that people who are going through distress, can read and help themselves get out of the debt mess.