Buy-to-let is not as popular as it used to be but it is still a highly profitable way to make money for those that have the necessary capital. The only problem is that the market is slower and it is more difficult to make a profit. However, this is not impossible.
If you are interested in making really good choices with UK buy-to-let investment property, the advice below will help a lot.
Properly Research The Buy-To-Let Market
This is particularly important for the new investors. There are different benefits and risks associated with the UK buy-to-let market. You need to be sure that you find the best possible investment for you. For some people, the available budget might simply perform better with other investments. For instance, in the past few years the high-rate savings account was more advantageous for most people.
The main reason why you want to be sure your research is properly done is that when you invest in buy-to-let properties you are committing a large capital. You want to be sure that house prices rise in the meantime and people will be interested. If the market is dead, you have money stuck in the property.
Carefully Choose The Area
You want to invest in a promising area, which does not mean cheap or expensive. Basically, your goal should be to buy a buy-to-let property that is located somewhere that people would love to live. Something like this can happen due to various possible reasons. In some cases the town is appealing while in others people are really fond of the region.
At the same time, it is really important to match property type with such locations. A big mistake many make is putting their money in properties that are really close to where they currently live. This can be a good idea since it means the market is well-known but it is not always the case. Broaden your research and match demand with property and location.
Properly Do The Math
You should always consider costs associated with owning the houses and the rent you have a big chance of getting. The lenders normally want to cover around 125% of mortgage repayments. Even going as high as 150% is a good idea.
Doing the math is particularly important in the event mortgages are involved. Also, maintenance costs can go quite high.
Always Consider The Target Tenant
Never make the error of imagining yourself living in the bought property. Instead of doing this, you want to consider the target tenant. This can easily help you to find something that people would actually want to rent. For instance, if the best target tenant is a student, everything has to be comfortable and clean but luxury is not normally wanted. Young professionals want something stylish and modern. Families require more space and tend to favor a completely blank canvas.
Last but not least, remember that tenants will want to stay longer if they are allowed to make changes to the property, like adding pictures or decorating.