I recieved and email very recently from a potential Warrington investor, this gent has come into some money and rather than leaving it in the bank he would like to invest it, he has been reading the Warrington Property Talk and decided to take up my invitation of popping in for a coffee and a chat. As always i like to get to know everyones situation individually and what their expectations are. Together we have come up with a strategy to start him off, i also shared my do's and don'ts to give Shaun something to use towards his research for his first BTL.
We at Hamlet Homes Warrington have found that advice for new Buy-To-Let investors can still be contradictory and confusing, like most things if you’re Buying-To-Let, you need to do it right and when a considerable amount of your own money is involved it becomes absolutely critical.
We thought, to try and make the process of buying to let simpler and more successful for you, we would prepare a definitive checklist. So here we go...
· Research your market – the area, the people you want to rent to, the available property, the benefits and the risks – and keep up with letting industry news.
· Choose your preferred tenant type. Students? Young professionals? Families?
· Find the right property that will appeal to them – houses, flats, older properties, newer builds? Students may not need anything particularly stylish but a young professional might.
· Then pick the right area where they want to live – parents may want to be close to schools and shops; wage earners need to commute to work; students have to be near to their college or university. Look outside your own area if necessary.
· If local crime statistics are available, take a look and bear them in mind.
· Study the condition of any property you are interested in – from roof, guttering and windows on the outside to condensation, leaks and electrical wiring on the inside. Be conscious of fire risks. Check whether extensions or conversions have met planning permission or building regulations.
· Don’t accept the first mortgage offer you get. Shop around. Gather information. Compare.
· Get the maths right – your investment might give a better return in some other way. How much is the right property going to cost? Is the rent you expect to get enough to cover the mortgage and give a profitable return? Does the potential capital growth add up to a good investment?
· Talk to an independent lettings agent before you buy. Most mistakes involve either wrong location or wrong price paid for a property.
· Don't be greedy – Buying-To-Let should be approached as a long-term investment, not a quick fix.
· Be prepared for costs that can upset your calculations – ongoing maintenance, small and major repairs, advertising, future rate rises, mortgage costs, agents fees, tax, falling house values, periods when you can’t find tenants and the property is empty.
· Get the right insurance cover – and that can include insuring yourself against tenants who fail to pay rent.
· If you’re going to manage the let yourself, be prepared to sacrifice your evenings and weekends! If this is likely to be more of a drain than you are prepared for, seek out a professional, fully accredited lettings agent who, for a fee, will look after your property, your interests and your tenants on your behalf.
This checklist offers a selection of do’s and don’ts, but, it is only for guidance purposes, we prefer to sit down, face-to-face, with a new potential investor and offer more solid professional advice, since everyone’s circumstances and expectations are very different. Why not come in and see us in our office on 6 Bankside, Crosfield Street, WA1 1UP or drop me an email with any questions on tpatel@hamlethomesproperty.co.uk
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