If you’ve never heard of the term ‘buy-to-let’ before, it refers to the investment of a property with the intention of renting it out. This type of deal has seen somewhat of a resurgence in recent times, and can be an attractive prospect in the right circumstances. It comes with a lot of considerations, though. Not only do you need to ensure you make the right initial purchase, but you need to deal with the demands of being a landlord. It’s complicated, and that’s why we’re here to make it a little easier for you.
Firstly, there’s the purchase, which is the bit that you’ll surely be relishing the most. It isn’t the same as any old investment, though. You need to research the market and seek out the best locations for buy-to-let opportunities. This could mean you target a big city, or it could mean you target a small village. While many landlords look to rent in a location close to their own, this isn’t always the best idea. Look farther afield if necessary to find the best deals.
You’ll also need to shop around to find the best mortgage. There are many buy-to-let mortgage options on offer from a variety of companies, so take your time with this. You might even want to speak to a consultant who can help you through the process.
In order to make the right decision, you need to be as clued-up as possible to beat others to it. The only way to develop this knowledge is to talk to others, gain experience and stay in-tune with any developments.
Letting It Out
Once you’ve found your ideal property, the real hard work begins. Now, you’re shopping for tenants, and you need to make sure you do it in the right way. The biggest question on your mind should relate to how you’ll deal with the landlord issue. Are you going to handle this task on your own, or are you going to outsource to an agent? The latter option will come with management fees, but you won’t need to deal with responsibilities. The choice is yours.
If you do choose the landlord route, you’ve got a big task on your hands. In the first instance, companies like Lennons Solicitors will make sure you’re doing the job correctly. There are many legal obligations that you’ll be required to abide by. If you don’t, you’ll be breaking conditions and ultimately, losing profits.
Under no circumstances do you want to build a reputation as a bad landlord. It pays to build a fantastic relationship with your tenants. While you might not want to sink any additional money into regular maintenance, it’s beneficial to do so. Building that sense of trust will mean that your tenant is more likely to want to stay longer, reducing the worry of void periods. And, when void periods inevitably kick in, you’ll have an ex-tenant who is more than willing to recommend the place to others.
Is buy-to-let right for you? Only you know the answer.