Buy-to-let property investment - how to get it right
Buy-to-let properties are often an appealing investment with the low rates on offer and properties available at good prices. However, when it comes to making an investment it is always important to ensure that all boxes are ticked to guarantee that everything in place is correct.
For those who have the ability to pull together a large enough deposit, a Buy-to let is an attractive proposition and certainly offers the potential of better returns than putting money into a savings account. With house prices rising, more people looking to rent and rental prices increasing it has never been more tempting for investors.
To ensure that everything goes to plan the following tips can help you get the most from your investment.
Research is very important as this will help you to understand the risks along with the benefits. The investment has to be the right one to suit your circumstances and whilst the returns may be better than a savings account, your investment is likely to be tied up for some time but it is always a wise idea to go in with an open mind in preparation for all potential increases and decreases in the value of the property. Knowledge is key.
The area in which you are going to purchase is very important and this can be down to a number of factors. Good transport links, schools and anything else that would make people want to live there are all vital things to think about from the offset. Sometimes purchasing property close to home is a good move as you are more than likely going to know more about the market and keep a good eye on the property.
Figures are more than likely the most important factor throughout and working them out is one way to understand how feasible it really is. It is all about understanding if the investment will work out and going into a buy-to-let property investment without any prior knowledge is likely to end in failure.
Understanding who you are targeting will help to build a better picture regarding the kind of property you will want. If you are aiming for the student market then they will want something that is easily maintained and comfortable whereas a family will require something with plenty of space and somewhere that they can make their own. Allowing tenants to make small changes to the property increases the chances of them staying longer.
Rent is key when it comes to buy-to-let properties and the real thinking behind the rent is that it should more than cover the mortgage costs as this will allow the build-up of extra money, but be mindful of the costs that come with running a property such as bills and management fees.
Don't be afraid to venture into new areas as this will open up the possibilities of finding a property that can offer so much more - or even look to find a property that needs renovation. Those properties that need renovation are often easier to negotiate on and can sometimes provide a more solid and quicker return on the initial investment.
It is important to remember that you should always try to get as much as you can for your money and this will involve some negotiation. Being a Buy-to-let investor is a similar situation to being a first time buyer and it will allow more room for negotiation as you are not part of a chain, so go in with a low price and see what happens.
Investing in a Buy-to-let property is an exciting prospect but it is not something that can be done without any prior planning. Think ahead and understand every aspect to give yourself the right chance of making an investment that works for you.
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