Buy To Let Mortgages UK
Buy to let is one of the biggest markets in the UK; it is also one of the fastest growing areas of investment...
Getting Started in Buy to Let
A buy to let property is a business and this fact should never be forgotten. Whether you own one small flat or a portfolio of ten country homes, it is your business expertise and your ability to structure the enterprise that will determine the success of your investment.
It is almost always the case that a buy to let investor will start with the one property as a first step on the buy to let ladder. This is a wise move, as buy to let really is not as easy as it appears and running a rental property can be a real headache, both in terms of the practicalities of finding a tenant and also from a paperwork perspective.
Decide initially, on the amount of time and money you can or would want to put into the project. Do you intend to manage the property yourself, or will you be employing a property agents? It is possible to go for a half-way house by employing an agent to find and vet the potential tenants but managing the property on a day to day basis, personally, which would increase the monthly yield from rental. Holiday lets are, typically, very labour-intensive but they do produce a higher yield and once again, it is possible to employ a management agent to run the entire process. Bear in mind, however, that these management costs will be much higher than in a standard rental situation, which may cancel out any financial benefits.
Financial Buy To Let Considerations
As well as the practical implications of structuring your buy to let, the financing also need very careful consideration. For those looking for a regular income, the most important factor will be the rental income in relation to the mortgage repayments. Others may be more interested in the capital growth, in which case the rent should still cover the mortgage repayments but the primary consideration should be the potential for both the property and the area.
Whenever you are doing the paperwork and analysing the potential of the deal, the following topics should be covered:
the financial input that will be required, initially and on an ongoing basis;
the time that you will have to put into the property, initially and on an ongoing basis;
the potential income from the property on a monthly basis; and
the potential capital gains for the property and the area in which the property is located.