With the increasing costs of buying a home, more and more people have the need to rent houses or apartments in order to have a place to live. In addition, depending on where you invest in property, there is always a higher demand for places to let in some areas. Here are five tips for considering an investment in buy-to-let properties:
Do Your Research
Find out about the buy-to-let process, the advantages of investing in property, and the risks involved. Research the housing market, especially in the areas you are thinking of buying in to see if it is worth your investment. Do not put money you cannot afford to lose into this type of investment because there is always a chance the value of your property could decrease and you could lose a great deal of money.
Is It Affordable?
Before you start looking for properties to invest in, take the time to figure out if you can afford a buy to let mortgage. Take note of the price of properties in your target area and determine how much you would charge for rent. Many financial institutions offering mortgages for buy-to-let properties want up to 25% of the properties price for the down payment. A buy-to-let property may be a viable option for you if you can afford a down payment and to repay the mortgage.
Consider Tenants’ POV
When selecting a property, do not just look at properties you personally find appealing, but look at them from the point of view of your targeted tenant. If you want to have students as your tenants, then you need to look for properties that are neat and affordable. If young families are your target market, you should look at the available amenities around the properties you are considering, such as food markets, schools, and public transportation.
To Manage or Not?
Before making a decision about investing in property, consider if you want to take on the duties of a landlord or not. You will need to be available at all times, you will need to deal with tenants who may be late with paying their rent and you may have to go to court in some cases. If you do not want the hassle of hands-on management, consider a property management agency if you still want to make an investment in buy-to-let properties.
Work with Brokers
Along with a good real estate agent, you should find good mortgage brokers to work with when investing in buy-to-let properties. They will have detailed financial information on the properties you are interested in and they can also help you find the best mortgage for your needs. Whether it is your first property or your 50th, you need good advice before putting your hard earned money down on any type of real estate transaction.
It is important to get all of the information you can before investing in a buy-to-let property. While some people have made money with these properties, it is still a risky investment and you should beware of all of the risks and benefits.