Buy-to-let has been expanding rapidly over the past year and currently continues to outpace other sectors of the property market which makes it an attractive investment opportunity.
With ever more people needing new homes and housebuilding lagging behind the growing demand, the private rented sector has been booming in recent years. More renters are expected to enter the market in the next few years and this improves the prospects for the buy-to-let sector as well.
If you are interested in becoming a landlord, the most important thing, like with any type of investment, is to seek professional advice.
Here are a few expert tips for letting a property that will help you decide if a property investment is something for you.
== Buying a property as an investment is not the same as buying an own home — keep cool and do not let emotions influence your decisions. ==
== Decision where to buy should be based on up-to-date research of tenants’ preferences. Choose among the most popular locations at the moment. ==
== Deciding about the type of property to invest in should also be based on current trends in the market. Ask letting agents about the most popular type of property with tenants at the time you are investing. ==
== Calculate your rental yield. This yield is the rate of return you will get from the rent paid by the tenant. It is calculated by dividing the annual rent by the amount you paid for the property. ==
== When doing your calculations take into account that a) property values change over time and b) there will be periods when you will not generate income from the property. ==
== Do things by the book and obey the law — get all the necessary paperwork certified and registered. Get insurance cover, register tenancy deposits. Prepare an inventory to avoid future disputes with your tenants. Declare the income you are making with the HMRC. ==
== Seek professional advice — before you choose your buy-to-let mortgage it is a good idea to consult an adviser. ==
== Choosing the right agent — As the relationship with your agent is likely to be a long-term one, it is important to make your choice carefully. ==
== Choose the level of letting agent service that suits you best — Letting agents generally offer three levels of service – a) Tenant-find only, b) Tenant find + rent collection and c) Full Management. Depending on your experience as landlord you should choose the level of your involvement in the process. ==
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