Buy to let properties can be an attractive option among many investors. This is especially true considering their low-interest rates. While it is true that the returns on strategies for traditional savings tend to be low, there is certainty and reassurance that is provided by property – something that has since enticed interested investors into the ever-growing market.
Many first-time investors are not aware though that the time for tax credits of 100% are long gone and in its place are higher fees for stamp duty that has been causing a reduction in the overall profits that property owners are getting. Still, while the rising charges and fees are making some dent on profit, it is a fact that buy-to-let still remains a popular choice.
If you are interested in buy-to-let, you will want to spend some time understanding the intricacies and nuances in the field, according to property specialist Experience Invest. After all, this can spell the difference between a highly successful venture versus one that can easily become an investment market. Below is a guide for buy-to-let investors before they should commit to a purchase.
It helps to compare the market for buy-to-let properties against other forms of investments. It is important to understand that this is not a market for everyone as there are numerous financial influences and uncertainties that may radically change how the investment will progress. Buy-to-let should be considered as something more for the long-term. So, if you are not the patient kind, looking for a short-term investment vehicle may be better for you.
Consider various investment locations and do not just focus your attention on the area where you presently reside. While familiarity with the location often helps reduce uncertainty, it may not often be the best financial option. Due diligence is important for you to choose the most ideal, most profitable location. See to it that properties in the area are comfortable enough for your budget too.
Understand the up-front cost for a buy-to-let purchase too. It is a profitable investment option. But this does not mean that you should just go ahead and jump ahead into making the purchase without even taking a closer look at where you presently stand as far as your finances go. You will often be required to cover a 25% deposit and you’ll also likely have to provide the evidence that your rental income can meet at least 125% to 150% of the repayments for the mortgage.
Shop around for the best lenders. You might also want to consider engaging a broker so you can find the best possible deal. Research on different loan products from different banks and shop around for good deals on fees and interest rates.
Work on making your property attractive to whoever your target tenants are. Not only should you consider what type of house your future tenants will like, but look into the interior style of the property too to better encourage tenants to choose you. Allowing your tenants some flexibility in terms of decorating the place or swapping furniture would also make the place more attractive. Learn more tips on how to invest in rental properties by reading about Experience Invest online.