With interest rates at an all-time low, Brexit causing uncertainty in the stock market and an ever-increasing demand for rental property, there’s never been a better time to invest in Buy-to-Let. So how do you go about becoming a landlord or build up your existing property portfolio? The following guide outlines some simple steps to take on your way to becoming a buy-to-let landlord.
Know Your Market
It may sound obvious but knowledge is vital to a successful buy-to-let investment. With the right information you’ll be in a better position to negotiate a good purchase price, buy a suitable rental property and keep costs to a minimum while maximising your return.
When viewing a potential investment property, put yourself in the place of your tenants. What will they need from a home? Which areas will they find desirable? Young professionals, for example, are likely to want good travel links, local nightlife and enough room to flat share, whereas a couple starting a family will have very different requirements.
Understand the Numbers
As the owner of a rental property, you’ll need to be on top of your budget. Take advice on how to set up your investment before you spend any money. A good accountant will be able to advise you on how to ensure your investment is tax efficient and how to claim any tax back that you may be entitled to.
A good understanding of bookkeeping will also stand you in good stead. Keeping track of your income, outgoings and the running costs of your portfolio from the start could save you a lot of money.
Remember - This Is a Business, not your Home
When you invest in a buy-to-let property, you’re doing it to make money, not to make a home for yourself. The aim is to purchase a property at a good price and whilst success in this largely comes with experience, the more negotiations you’re involved in, the more you’ll see where you can save money.
Know Your Own Worth
As an investment buyer, you don’t have a property to sell, which can be attractive to vendors looking to avoid the problems associated with a long chain.
Plan for all Possibilities
Careful planning can help to overcome many of the problems experienced with a buy-to-let investment. You’ll need to have good contacts with tradespeople, for example, if you’re going to manage the let yourself, and you may also need a bookkeeper and accountant. This is where we can help. By employing a letting agent to manage your portfolio, you can save yourself time, money and remove any associated stress, and we can tailor a service package to meet your precise needs.
There will inevitably be some unforeseen costs to manage and you’ll also need to plan for “void” periods - these are the times when your property is vacant and therefore not bringing in a rental income. The Property Centre’s Diamond Service can offer you peace of mind with this, as it provides a guaranteed rent, regardless of whether a property is occupied or not..
Preparation Prevents Poor Performance
We can help with all aspects of building a buy-to-let portfolio, including finding properties that may be a suitable investment, advising on the likely rental income of a property and providing advice on financing your buy-to-let. We can also market your property, identify and vet potential tenants and manage every aspect of the rental from check in, property visits and check out.
If you already have a rental property, you can register as a landlord or if you are considering letting a property you can request a free market appraisal. Alternatively you can contact our lettings department on 01452 888060.