5 Things to think about when buying a buy to let property

June 28, 2022

Buying a buy to let property is a big step and an exciting one too so it’s vital you do it right. So here are some top tips on what you should be thinking about before you take the plunge.

1. What type of buy to let property do you want to buy?

Buying a buy to let property involves parting with a lot of money so make sure you take your time choosing the right property. For example, do you want to buy a new build which will have fewer maintenance issues? Or are you hoping to add value to the property, in which case you might be looking for an older property you can do up or extend. And think about how many bedrooms you’re looking for too.

2. Find out what House in Multiple Occupation means

If your buy to let investment is going to house at least three tenants who aren’t members of the same family, it will be classed as a House in Multiple Occupation. On the upside you might be able to get more in rent per month. But you might find your tenants change more frequently and there are extra responsibilities you’ll have too. And depending on where the property is and how many people are living in it you may need a licence as well.

3. Decide on the type of tenant you want when buying a buy to let property

So, what else do you need to think about? Well you’ll obviously want to find tenants who would like to live in your buy to let investment, but you’ll also need to decide on what type of tenants you’d like to attract too because this will help determine the type of property you buy and where it is.

These types of tenants include:

Young professionals

If you rent to young professionals, you may find they rent for a long period while they’re saving up to buy their first home. And if you’re aiming for this market, bear in mind they may be factoring in the commuting time to work so it’s a good idea to look for properties with good transport links.

High earners

With these tenants, they may only be working in the area for a short period of time and looking for high spec accommodation to rent for the period.

Students

When you’re renting to students look for properties with excellent transport links into and out of the city and also houses that are close to the campus.

Social tenants

You may be looking for tenants who receive benefits. Although bear in mind that not all lenders will lend on all tenant types so it’s a good idea to speak to an expert mortgage adviser before you start house-hunting so you’re fully informed at the outset.

4. How will you manage it?

When you’re buying a buy to let property you should also consider these factors:

  • Maintenance: It’s your job to look after the property and sort out any repairs if something breaks down like the boiler.
  • Managing tenants: Also bear in mind there could be difficult conversations that need to be had like if your tenant is late with their rent. So if this makes you uncomfortable you may consider employing a letting agent who’ll be the first point of contact for the tenants.
  • What if your property is empty? When you’re working out the financial side of buying a buy to let property you should also consider what would happen if your property is unoccupied for a period. So, it’s a good idea to put some cash to one side to cover the mortgage in case this happens.
  • How much rent could you get? When you’re looking at buying a buy to let property check how much similar properties are currently being rented out for.

5. How much can you borrow on a buy to let mortgage?

Well, the first thing to be aware of is the fact that buy to let mortgages usually require a bigger deposit than residential mortgages. Also the amount you’ll be able to borrow will be linked to the amount of rental income you expect to get.

But there are other factors too so it’s a good idea to speak to an expert mortgage adviser who’ll be able to explain it all to you. They’ll also use their expert knowledge about buy to let mortgages to find you the right mortgage for you too when you’re buying a buy to let property.

Our advisers are happy to answer all your questions so if you want to find out more about buy to let mortgages, please don’t hesitate to get in touch.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

 

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