If you are considering investing in a buy-to-let property, then we have some great advice for you to get you on your way.
Check out these 6 things to remember as you make your decisions on a buy-to-let property –
1. Make sure you do your research
Taking some time to check out the buy-to-let property market and what kinds of investments are available is time well-spent. This way, you’ll be able to make an informed decision when it comes to making a purchase and you can feel more confident that you have chosen the right property in the right area for your purposes.
2. Work out the kind of return that you need to get and what you can expect in terms of rental income
Most lenders look for a rental income to cover 125% of mortgage re-payments and might also want a 25% deposit. You will need to make sure that the investment property that you purchase will be capable of bringing the kind of returns that you need to cover your costs.
3. Choose your geographical area wisely
One of the biggest decisions to make as you start out in property investment is where to buy. This will be affected by what kind of tenant you are looking for – you’ll need to choose property near a college or university for student tenants or an area with good transport links, schools and leisure facilities for families or young professionals.
4. Don’t be over-ambitious
Taking a little care to make sure you’re not over-stretching yourself in terms of property size, up-keep or amount of rent that you’ll need to receive to cover your costs. If you go for a property that is too large or too expensive, you might struggle to keep up with the maintenance and mortgage.
5. Consider renovation
One way to come by a property that is right in terms of size and geographical area at a good price is to consider purchasing one in need of renovation. You are much more able to negotiate on price if the property is tired and in need of work. Remember to go for a price that factors in the cost of the refurbishment.
6. Don’t be afraid to haggle over price
Bear in mind that you are an attractive option to someone selling their property as you are not part of a chain and so there’s less risk of the sale falling through. This is a useful bargaining chip when it comes to talking about price. The trick is to make a low offer and not be talked into paying more than you are prepared to (having set yourself a budget factoring in mortgage payments, renovation etc).
If you are looking for further advice on property investment, take a look at the property mentoring services we provide at Nick Fox Property Mentoring here. We offer a range of mentoring packages to suit all needs.
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