Now is a good time for potential buy-to-let landlords to enter the market, due to the ongoing high demand for rented property, according to an industry expert.
Having compiled a list of tips for would-be landlords, Dick Jenkins, chief executive of Bath Building Society, has said there is a considerable amount of funding for such ventures available, with some lenders offering up to 80 per cent of the property purchase price.
“In contrast, first-time buyer funding is still scarce and, literally, at a premium.” Jenkins continued.
“This means there are plenty of potential tenants about, so it shouldn’t be too hard to let the right property. Moreover, the high level of demand for rented property is keeping rents high. The very low rates of return available through savings accounts makes the returns available on buy-to-let look very attractive indeed.”
“However, those coming into buy-to-let hoping to see the value of their property rise dramatically probably won’t see much in the way of increasing property values for a few years.”
Tips to would-be buy-to-let landlords
- Remember being a landlord is not for everybody. Being a landlord carries responsibilities with regard to safety of your tenants and to safeguarding their deposit that you will be expected to take seriously.
- Budget for voids – periods of time when your property may be vacant – and maintenance.
- Find properties that are likely to be easy to let – think of the kind of tenant you are hoping to attract and put yourself in their shoes when thinking about what to buy and how to present your property
- Use a letting agent, preferably a member of the Association of Residential Letting Agents, which demands certain standards of its members, especially if the property is distant or you are new to buy-to-let. They have years of experience which can be invaluable to the new landlord. A good letting agent will have systems and processes to vet your tenants, bad tenants being one of the biggest risks in the buy-to-let world.
- Do your research. Ask others who do buy-to-let about their experiences. It’s always cheaper to learn from other people’s mistakes than your own.
- Think ahead. Just because conditions are favourable for landlords at the moment, they won’t always be. Think about possible rises in mortgage rates or a fall in rental yields.
