With interest rates on savings at an all time low and with stock market volatility, investing in a buy to let still seems like a really attractive way to see returns on our savings. But there are various buy to let pitfalls you will need to avoid before spending your money on a rental property; Mortgage rates for example are at an all time low, so make sure that when rates go up it is still a wise investment, and you can meet your repayments.
So here are a few of our buy to let property tips:
Research the market - for any investment, research is key, ask the experts at Intercounty about average rental yield you can expect in your chosen area, price rise increases and historical performance.
Find the best investment areas - this doesn't mean where the properties are the most expensive or the cheapest, this is where you will be able to maximise the return on your property investment. You need to decide which market you are aiming for, for example if you are aiming at a family market, are there good schools nearby and does it fall into the catchment area? If you are looking at renting out to students, is there a University nearby? Will you be aiming for commuters and if so, are there good transport links within walking distance?
Investing - you should calculate the costs of owning your rental property, working out the worse case scenario on your mortgage repayments, annual rental repairs and if the property is sitting empty for two months per year.
Shop around for the best mortgage rate - there are some great mortgage rates around at the moment, some with fixed rates, which will ensure when rates do rise you won't have to pay extra, so make sure you find the best available.
Returns on your investment - if you are looking at building a property portfolio then this will take some time, investing in property needs to be considered as a long term investment strategy. As most buy to lets mortgages are done on a interest-only basis, you may be able to offset this expense against your tax return.
If you would like any advice on investing in a buy to let property then why not pop into your local branch of Intercounty for a chat and a coffee or call our team on 0844 8111090