Whichever way you look at it, there’s never been a better time to dive head-first into the UK’s buy-to-let property market and take home a pretty appealing secondary revenue stream. Much of the UK public is finding itself wholly priced out of the country’s property market, which in a general sense isn’t an ideal scenario but is one that’s nonetheless playing right into the hands of the savvy investor. Going forward, more people than ever before will find they have no choice but to rent, which means that those who own the most desirable properties in the most in-demand areas are looking at a rather bright future to say the least.
Of course it’s not as easy as just buying at random – even with a generally high level of demand there will always be thousands of properties that are outright duds as far as investment prospects go. As such, it’s important to bear a few of the most crucial rules of all in mind before and during the purchase process, in order to ensure you make the right moves.
So with this in mind, here’s a quick look at the five golden rules for property investors looking to make the right buy-to-let move in today’s market:
1 – Do Your Homework
First of all, it’s easy to take a brief look at the situation and just dive blindly into an investment under the assumption that you cannot go wrong. Sadly, this is a recipe for disaster as just as there are great investments out there, others could cripple you…financially speaking. You’ll need to consider the benefits, the drawbacks, the expenses and pretty much every last detail across the board before you can say you’re ready.
2 – Location is Everything
Above and beyond pretty much everything else, the location in which you choose to buy the property will determine not only its success, but who you attract. For example, affordable property investment in Oxfordclose to the city’s university buildings will net you plenty of interest from students, while a more rural property may be of interest to young families and couples looking for long-term lets. And it’s not just a case of choosing a town, city or region that’s ‘nice’ either – you need to factor in the actual demand for properties and how much rent people are willing to pay.
3 – Number Crunching
To say there’s a lot to take into account when it comes to finances…well, it’s a bit of an understatement to say the least. More often than not, it’s nigh on impossible to work out where you stand and what you can afford without the input of the professionals. You need to work out what you can afford right now by way of deposit and mortgage payments, consider how the mortgage payments you make may increase over time, factor in taxes, maintenance costs, decorating and so on and so forth before you can even consider working out how much you stand to make from rental income. Unless you’ve crunched the living daylights out of the numbers, you shouldn’t even be thinking about making an investment decision.
4 – Get a Great Mortgage
Never fall into the trap of choosing the first lender that accepts your mortgage application and seems to tick all the right boxes. The reason being that with thousands of competing lenders on the market, you’re almost guaranteed to get a better deal if you shop around for long enough. When you get a great deal, go to another lender and ask them to beat it. You can then continue this process until you find the best deal of all – and the best long-term deal at that.
5 – Think From Your Tenant’s Perspective
Last but not least, it’s common for new buy-to-let investors to think about exactly what they themselves would want were they to set out looking for a property to rent. However, this has a tendency to lead people down the wrong path as it’s not you that’s going to be living in the property, but rather your tenants. As such, you need to put yourself in their position and think about what’s of most importance to them. From local conveniences to public transport to schools to outright low prices, what is it they’re looking for and how can you make sure you give it to them? Needless to say, you can’t hope to do any of this before first establishing exactly who it is you want to let out to in the first place, which is why this should and must be one of the very first things you think about.
