So you are interested in becoming a buy to let property investor? You like the idea of buying a property and being the landlord and collecting those rents. You would like to create a portfolio of buy to let properties and create a significant monthly income. There is nothing wrong with any of this so here is what you need to do.
Is Buy To Let Property Investment Right For You?
The truth is that it isn’t right for everyone. There are other ways that you can invest your money that are a lot less stressful. Usually the returns are higher if you decide on property investment but talk to a financial advisor that you can trust before you take the plunge.
Being a landlord can be tough. You are at the beck and call of your tenants all of the time. You can get letting agencies to handle some or all of the responsibilities for you but this will cut into your profits. Can you handle calls at 2am about a blocked toilet?
Do Your Homework
Get your self out and about and talk to local letting agencies about the demand for private renting in your area. If your area does not offer the opportunities that you are looking for then be prepared to look further afield.
You have to know your numbers in the buy to let investment game. Calculate your net cashflow on all properties that interest you. This is the difference between rental income and costs. It is easy to underestimate costs so try not to do this.
If you are buying an older property that will need renovation then factor these costs in as well. There will also be some legal costs and if you use an agency then they will charge too. Know all of your numbers and be sure that everything “stacks up” before you commit. Never purchase a buy to let property on emotion!
Be Patient And Consistent
You may be really lucky and find the ideal buy to let property at the right price in the right location very quickly. But the reality is that you probably won’t. It can literally take months to find the right property and put in all the research work to ensure it is the best deal.
View as many properties as you can. Keep a list of these properties and compare them for potential. As you view each property take a picture of it so that you can easily recall it later on.
Purchase At The Right Price
All smart buy to let property investors make money when they buy the property not when they sell it. They will always look for properties they can add value to, via a refurb, a conversion, an extension etc. plus you can never be certain whether property price falls are around the corner so get the very best price possible. This will improve your returns when the going is good.
On the subject of money you need to be prepared. These days you will usually require a minimum of 25% of the asking price for your deposit and other costs. Before you make an offer make sure you have a good conveyancing solicitor behind you. Don’t be tempted to go with one of these bucket shop companies, cheap will cost you in the end.
Getting Your Property Ready
Apart from any renovation work you will need to ensure that your property meets all of the safety standards for the private rental sector. These include gas and electrics, the installation of the correct smoke alarms and CO2 alarms and an EPC certificate.