26 Jun Choosing a Buy to Let Property
Choosing the right buy to let property – The level of success you can achieve with buying to let will depend a great deal on making sure you choose the right property.
This may sound obvious, but many ambitious landlords do not spend enough time thinking about what buy to let property will best suit their plans. Perhaps the 3 most important things to consider, when buying a property to rent, are:
- Finding the Right Tenant
- Property Location
- Rental Income
- Finding the Right Tenant
Who are going to be your ideal tenants?
Each of these tenant types have different types of property requirement.
- Young professionals?
There are also different considerations to take in to account regarding property location. If you find you have the wrong property or location, it can be difficult to target the right tenants. Making sure you have the right target audience can make it easier to let your property. The greater the chances of attracting the right tenants, the more chance of achieving the rental income you want. Furthermore, the greater are the chances that you will attract tenants quickly. Remember, every day your property is empty you are losing rental income.
It is quite important to think about how you are going to manage your investment property.
If you are thinking of managing your property yourself then ideally, you will need the property to be close to where you live. However, if you are planning on using a letting agent to manage your buy to let property, chances are you can look further afield to areas that might have a higher demand for rental property.
We recommend you consider talking to some local rental agents, as they will know what is in demand. Agents can equally help you with your rental strategy, they can even help you spot a gap in the market. But perhaps it might be an idea to speak to more than one rental agent to get a rounded view of the local market.
Again, it might seem obvious but, you will need to set your rate of rental charged to at least cover your costs. You will need to consider how much your repayments might be on any buy to let mortgage. You will also need to take into consideration any additional costs associated with your buy to let property, like insurance, repairs, and agent’s fees.
Budgeting is important. We suggest you take a little time to work out what you will need to spend each year. Then from this, estimate what you might lose in rental income because of periods where the property might be empty (rental voids).
Check out the local rental market from time to time. It is not a bad idea to see what other landlords and agents are charging for various property types in your target area.
Finally, the expected rental income on your let property will also determine how much you can borrow through a buy to let mortgage. Our advisers will help you here but, the level of rental income you can achieve is important, so it is ideal if you have a good understanding of what it will be.
We also recommend The Money Advice Service if you want more detailed information.