Become a Buy-to-Let Investor
With low-interest rates and record high rental returns, there has seldom been a better time to consider joining the growing number of people choosing to invest in property.
According to the Council of Mortgage Lenders, more than 130,000 buy-to-let mortgages were arranged in 2013, a 50% increase since 2010 – and it’s easy to understand why.
With banks offering mortgages at extremely competitive rates of interest and house prices still on the path to recovery following the recession, property has become an extremely lucrative avenue in which to grow your savings as opposed to the disappointing levels of interest currently offered by many banks.
Rental returns are experiencing a record high and look set to continue increasing with the influx of demand from new tenants – potentially pushing rental yields above their current average yield on 5.11% (Association of Residential Letting Agents).
If you’re considering entering the buy-to-let market, it’s important to start by getting the very best advice. Here are our experts’ top tips on investing in property.
Choose Your Tenant
Before searching for a property, decide on the kind of tenants you are looking to attract, as that will strongly influence your buying decision.
Families tend to look for houses with three or more bedrooms close to schools and other amenities on long term lets, young professionals may look in cosmopolitan locations where property prices and rental returns are higher, while students often seek large houses within walking distance of their university.
Once you have made your decision, Edward Mellor’s Lettings department will be able to guide you in choosing the right location and finding the right investment property.
Consider Hedging Your Bets
If you have a large amount of capital to invest, is buying one address outright your most financially viable option?
Splitting your funds between a number of properties, with the remainder consisting of a buy-to-let mortgage, can often prove more profitable and also mean you are still receiving income from your other assets should one be experiencing a void period.
To find out more about whether splitting your cash could maximise your profit, speak to our Buy-to-Let Mortgage team.
Consider whether you would like a house that a tenant can move right into or whether you would be prepared to take on a property requiring work.
Properties in a poor condition are often sold at auction for drop-down prices, giving you the opportunity to snap up a bargain!
To find lots matching your requirements, speak to our Auction Department or view the online catalogue for our upcoming event.
Manage your Budget Wisely
When purchasing a buy to let property, it’s important not to stretch your finances too tightly.
Remember to consider factors such as Stamp Duty and any service charges, as well as leaving funds aside to handle repairs, void periods between tenants moving in and out, and any management fees.
Hands On or Hands Off?
Decide how involved you want to be in the everyday running of your property. Edward Mellor’s Property Management team offer packages based on your requirements – from simply collecting and placing the rent into your account to fully managing the property.
If you don’t have time to maintain your portfolio yourself, hiring a professional is often the most efficient solution.