Four essential rules for first-time buy-to-let investors
Dangerous supply shortages on the UK housing market are playing right into the hands of savvy buy-to-let investors. Across most areas of the country, average monthly rents are hovering at all-time record highs. With further growth forecast over the months and years to come, there has never been a more profitable time to consider becoming a private landlord.
Even so, it is not a decision that should be taken lightly. UK house prices are also higher than they have ever been, and the government continues to put the squeeze on landlords’ profits.
Consequently, those considering buying into the BTL sector for the first time are being advised to take common-sense precautions, and to seek independent expert advice before making their moves.
In particular, the following four essential rules from established buy-to-let investors could help first-timers pave the way for a successful future:
1. Take your time when selecting an area
Location is everything when it comes to buy-to-let investments, and the private renting landscape is shifting continuously across most areas of the country. Avoid focusing too intensively on how a region is performing today – your goal should be to pinpoint a place with a prosperous future to come.
This is where independent expert support, particularly that of an experienced BTL broker or letting agent, could prove invaluable.
2. Be careful when planning house-flipping projects
The temptation to pick up a property in poor state of repair and renovate it yourself is understandable. Oftentimes, the most successful BTL investors are those that see the hidden potential in properties overlooked by others. But at the same time, biting off more than you can chew as a first-time investor is inadvisable.
Particularly where there are major structural issues to take into account, you need to be realistic with the kinds of renovations and restoration projects you can comfortably handle.
3. Don’t invest too far afield
When you are looking to pick up your first buy-to-let property, it is a good idea to set your sights on an area no further than an hour’s drive from your locality. Even if you employ a letting agent and a property manager, you will still need to visit your BTL property on a regular basis. In addition, it makes sense to invest in an area you are at least moderately familiar with.
Always remember that the further afield you set your sights for a BTL investment, the more hands-off your role will subsequently be as a landlord.
4. Find the right product and lender
Specialist buy-to-let mortgages are available in an endless range of shapes, sizes and specifications. Each of which has its own unique pros and cons, which you must ensure you understand before deciding which is for you. Consulting with an independent broker at the earliest possible stage will help you build a clear picture of the products available to you, and which lenders best suit your requirements.
After which, your lender will negotiate on your behalf to ensure you get an unbeatable deal from any top-rated BTL property finance specialist.