Investment in rental property has become increasingly popular in the UK in recent times.
But if you're considering buying to let, it's important to do your research first. As with any investment, you'll be undertaking a significant element of risk.
Whether you're looking to buy just one property or develop a whole portfolio, there are a few golden rules to remember that should help to increase your chances of a successful venture.
Enlist support of an agent
Before you start buying-to-let, decide how much time you can realistically dedicate to your new enterprise.
Being a landlord can be very time-intensive, so you may want to share the workload by enlisting the support of a letting agent.
Know the area
Buying in property hotspots is all well and good, but it’s important to buy in an area you know well. You’ll probably be most familiar with towns and villages close to where you live, so consider these as potential purchase areas.
Buying locally has the added advantage that if there’s a problem at the property, it won’t take you hours to get there.
Know your market
A clear understanding of your target market is essential. Are you going to cater for students, young professionals or an older market?
Your property and your target market have to be a perfect match. If you’re letting to students, cheap terraced housing may prove a suitable investment – but the same property is unlikely to attract much interest from professional couples.
Advertise specifically to the kind of tenant you want to attract, and meet them personally before signing any contracts. It’s important that you feel comfortable with the people who will be living in your property.
Research buy-to-let mortgages
Specific mortgages exist for buy-to-let properties, often requiring a deposit of between 20 and 25%. Do your research and make sure the numbers add up before proceeding any further.
Keep it simple
Whatever kind of property you decide to buy, don’t overspend on furnishings and decoration. Keeping the living space clean and neutral allows potential tenants to see the property as a blank canvas that they can make their own.