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.

Will your investment work out? What will happen if the property sits empty for a month or two? Use a mortgage calculator to help with the maths.

4. Shop around
Do not just walk into your bank and building society and ask for a mortgage. It sounds obvious, but people who do this when they need a financial product are one of the reasons why banks make millions in profit. Use of a mortgage professional can help any investor to maximise any potential profit.

5. Think about your target tenant
Instead of imagining whether you would like to live in your investment property, put yourself in the shoes of your target tenant. Who are they and what do they want? If they are students, it needs to be easy to clean and comfortable but not luxurious. If they are young professionals it should be modern and stylish but not overbearing. If it is a family they will have plenty of their own belongings and need a blank canvas.

6. Don't be over ambitious
We have all read the stories about buy-to-let millionaires and their huge portfolios. In most places the days of double digit house price rises are gone, so experts say invest for income not short-term capital growth. Once mortgage, costs and tax are taken into account, you will want the rent to build up over time and then be able to use it as a deposit for further investments.

7. Consider looking further afield
Most buy-to-let investors look for properties near where they live. But your town may not be the best investment. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent anyway they should do that for you.

Cast your net wider and look at towns with good commuting links, that are popular with familes or have a sizeable university. Use www.findaproperty.com to look at different areas.

WHAT SHOULD YOU DO?

Give us a call or complete one of our simple contact forms & you can choose whether you would prefer a fully qualified advisor to contact you to assess your situation or whether you would prefer to submit more information through our website & have a recommendation supplied to you within 24 hours.

Whichever method you choose, you are under no obligation to proceed with any recommendation. We have access to the whole of the mortgage market & our advice is totally impartial. We feel confident that our advice will have significant impact on your financial circumstances.