With interest rates at a record low, house prices on the increase and a number of recent changes made to pensions, an increasing number of people are considering buy-to-let as an investment option. With a wide range of options when it comes to buy-to-let and an increasing number of individuals looking for a rental property rather than buying due to an increase in house prices, there has never been a better time to invest in rental property. If you are considering buy-to-let investing, here are four of the main things which you should know.
The most important decision that you will make when you invest in buy-to-let property is that of your target audience. Deciding who you are going to rent your property to and how much for is a pivotal decision which you should have in mind when you are looking for a suitable property to invest in. When deciding on your target audience, you will also need to keep in mind any further costs which you may need to spend on the property in order to make it suitable for tenants, for example having a new bathroom fitted with a high quality shower, tub, sink unit and cabinets.
Before you set your heart on a buy-to-let property, it’s vital to ensure that you carefully consider the area. The area where your property is located is pivotal to the type of tenants who you will be letting to; for example if you are hoping to invest in a buy-to-let property in order to rent it out to students, you should choose an area which is close to a university campus in order to attract the right target market. On the other hand, if your target market consists of families, you may wish to consider purchasing a property which is close to schools.
Being a landlord is an investment, which means that it doesn’t come risk-free. When purchasing a buy-to-let property, it is vital that you consider all of the financial implications of the purchase and prepare for every possible eventuality when it comes to working out what you can afford. If you plan to mortgage the property and cover these payments with the rent payments from your tenants, you should also think about any other potential costs which you might face, for example repairs on the home or cleaning costs when a tenant leaves the property.
Before you decide to go ahead and invest in a rental property, it is important that you are fully prepared. This not only means that you should prepare for any possibility when the tenants are living in the property, but also financially if you should need to leave the house empty for any period of time. You will also need to be prepared legally – there is a lot of potential for things to go wrong when renting out a property, and it’s vital that you are fully equipped and ready to deal with any one of them.
Buy-to-let is becoming a popular method of investment, but preparation is key to success.