Tips and tricks for first time buy-to-let landlords

Dipping your toe into the world of property investment can be daunting. There are so many things to be aware of which can trip you up along the way, but it can also be a very profitable way to make a living to add to your revenue stream. If you are venturing into buy-to-let property first time, then here are a few points that you need to know.

Buy-to-let rent

Your first foray into buy-to-let investments is an exciting one and offers some great financial prospects. You should think of the rent that you receive as your revenue that allows you to pay your costs, such as your mortgage payments, ground rent or service charges. When all this is taken care of, the rest is your profit.

Your mortgage lender will want to know how much rent you expect to receive, so do your homework. This is so they can be confident you will be able to cover your repayments, however they will also look at your other income, savings and credit history as well.

You will need to consider how you will cover your costs if a tenant moves out and you are not immediately able to replace them. The same question arises if a tenant defaults on their payments, so make sure you have provisions for this and any ensuing legal costs.

Where to buy?

Investors start buying property for all sorts of reasons. It might be the house next door, one a friend is selling or a deal that just looked too good to ignore. However, before you buy anything, look at where the property is and whether it is the right location for you and your profits.

Looking at the rental market in the area will help you to decide how much rent you can command from a property as well as how much demand there is likely to be for it. Choosing an area with good schools and amenities, low crime levels and strong transport links is likely to increase your chances.

Maintenance

If you are a hands-on type of person, then you might feel confident repairing fixtures and fittings, unblocking a sink and filling a hole in a wall, and this can save you massive amounts of money.

However, most of us do not feel confident with these sorts of tasks and prefer to leave it to a professional. There are a number of management agents who will be on call to deal with all of the problems that might arise without needing to bother you. They come at a price, but they also relieve a lot of stress.

Legal concerns

There are many laws that apply to landlords and tenancy agreements, and you need to be on top of them. These can relate to safety checks, what to do with deposit money and what your rights are if a tenant doesn’t stick to their side of the agreement. Getting your contract drawn up by a professional is a must, but make sure you are aware of all your other responsibilities too.

Mortgages

A mortgage for a rental property is different to one for buying your own house. You will need to look at current rates as well as how they might fluctuate in the future and choose a deal that works for the long-term plan that you have in mind. Speak to a mortgage advisor who can talk you through all the products that are available to make sure you get one that works for you.

Property investment is an exciting ride, and there will always be a few bumps in the road, but doing your research will make sure that you can enjoy the process and reap the rewards.