In our last blog we briefly described BTL mortgages.
In this blog we will be giving some hints and tips on picking a property. We have personal experience with BTL’s and we think this helps when it comes to advising you.
Pretty much a golden rule is buy for as little as you can and rent from as much as you can without being over greedy . For example say the going rent was £600 but you wanted £650, for every month you don’t find a tenant willing to pay the rent you want it will take you 12 months to recover the missed month.
- Research the market on BTL in your chosen area. There is no point in buying say a 1 bedroom property if there is no demand but there may be a huge demand for 2 bedroomed property
- Choose a promising area to invest in property. This is not necessarily about it being the cheapest area but more about it being place people would like to live. Ask yourself these questions: Where in your town has special appeal? Where has good transport links? Where are the good schools? Where do students want to live?
- Shop around for the best BTL Mortgage. Again we come in handy here. We can do the hard work for you and search the whole of the market for the right deal for you.
- Think about your target tenant. Remember you are not going to be living there – this is an investment and you need to be viewing properties with your head and not your heart.
- Consider looking further afield. If you live in a small village or town then it might not be the best place to invest in a BTL property.
- Consider doing a property up. You may be able to get a better buy this way and add value to your property too. This could also help your property be a more attractive option for tenants. Just don’t spend a fortune on it – you don’t need to.
- Look for a low maintenance property. You want something easy to maintain – both for your tenants and yourself. A chocolate box, thatched property is not a wise B2L choice as running costs could clear any profit very quickly
- Haggle over price. You have the same advantages as a first time buyer as you are not reliant on selling a property.
- Consider how hands on you want to be. Are you going to use a letting agent or do it alone? It will impact cost.
- Don’t offer a furnished property. At the end of the day this is your choice but if you offer it furnished then you will have to replace something if it breaks – this will work out more expensive for you in the long run.
We would be happy to talk to you further about searching for a BTL property should you wish to know more.