Buying a property to let as a long-term investment to generate an income has become an increasingly popular option over recent years, especially at a time of low interest rates and stock market productivity. A demand from would-be tenants of rental property continues to grow in many areas of the region.
Knights Property Services are able to lead you through and advise regarding your purchase, letting and management of your Buy to Let property or portfolio. Below are some factors that you will need to consider:
1. Research the market
- Carefully research the local market and tenant demand in the area you intend to buy.
- Find out the tenant demand and the most sought after size, style and type of property required.
- Consider local amenities, transport links and employment which will all help to ensure your property is let quickly. Choose an area where people want to live.
- Knights Property Services are happy to assist in providing the advice and help to ensure you purchase the most suitable Buy to Let property.
- Do not let personal taste cloud your judgement, always invest with your head and not your heart.
2. Do the maths
- Get your sums right. Will the rent cover borrowings and costs after allowing for void periods?
- As a landlord you will continue to be responsible for maintenance costs, servicing of fixtures and fittings to include boilers, buildings insurance etc.
- It is best not to purchase a property that will require lots of ongoing maintenance.
- What will be the cost of refurbishment prior to letting? The less you have to do the better.
- Think of Buy to Let as a medium to long-term investment.
- Do not be over ambitious and go for a realistic yield.
- If you intend to borrow, ensure you choose a mortgage that best suits your current and future needs.
- Take advice from an experienced independent mortgage advisor.
- You will need money to cover upfront costs to include deposit, legal fees, stamp duty etc.
- The income from renting properties is taxable but you will be able to offset some of the costs you incur as a landlord to include:
- Agency Fees
- Insurance premiums
- Interest element of mortgage payments
- Repairs and renewals
- 10% of rent for fair wear and tear (furnished property only).
- Accountancy and other professional fees.
- If and when you decide to sell your Buy to Let investment, the proceeds may be subject to capital gains tax.
- Visit hmrc.gov.uk for more information.
4. Beware of your landlord obligations
As a Buy to Let landlord you have obligations to your tenants and need to comply with certain regulations to include:
- Gas and electrical safety
- Repairing and maintenance obligations
- Fire safety of furnishings
- Deposit protection
- Tenancy agreements and notices
- Energy Performance Certificates
Knights Property Services, as bonded agents of UKALA and The Property Ombudsman, are required to work within the best Codes of Practice and have qualified members of staff with many years experience advising landlords.
5. Looking after your investment
You will need to decide how you want your property managed during the tenancy. Knights Property Services are able to offer a number of tailored services to suit your needs.
Many Buy to Let landlords require a fully managed service so that a third party will be dealing with all aspects of the letting and management of the property to include the collection of rent.
You may wish to manage the tenancy and property yourself and therefore prefer our Rent Collection or Let Only services. To find out more about our services please visit Landlords Letting and Management Services
6. Protect your rental income
In order to protect your rental income and investment, increasingly Buy to Let landlords take advantage of our Rent Guaranteed service.