BUY TO LET
1. Research the market
If you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits. Read Buy to Let guides which give a comprehensive run down on the subject.
Make sure buy-to-let is the investment you want. Your money might be able to perform better elsewhere. If you know someone who has entered the buy-to-let market, ask them about their experiences or chat with other investors.
2. Choose a promising area
Promising does not mean most expensive or cheapest. Promising means a place where people would like to live and this can be for a variety of reasons. Where in your town has a special appeal? If you are in a commuter belt, where has good transport? Where are the good schools for young families? Where do the students want to live? Have a look at the rental market and homes to buy in your town on www.findaproperty.com.
3. Do the maths
Before you think about looking around properties sit down with a pen and paper and write down the cost of houses you are looking at and the rent you are likely to get. Traditionally buy-to-let lenders want rent to cover 125% of the mortgage repayments, although some are relaxing this, and interest rates are higher. Most also look for a 15% deposit, which protects against falling prices.
