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Option Homes Ltd - News- Top Tips for New Buy-to-Let Investors – Part 3

Top Tips for New Buy-to-Let Investors – Part 3

Date Added 19/06/2016

In the first two parts of our advice guide for new buy-to-let investors, we discussed the initial issues you need to be concerned with when considering your options, as well as examining the more practical issues such as risk awareness. There was also advice on knowing what kind of landlord you want to be as well as the kind of tenants you want to attract to the property you purchase. In this third and final part of the guide, there is some more practical advice, this time focused on finding the right property as well as the right mortgage for that property.

Find the Best Mortgage by Comparing Them

So many buyers, whether it`s for their own homes or a buy-to-let investment, don`t think about shopping around for a mortgage on the assumption that they are all pretty much the same. This couldn`t be farther from the truth. You`ll want to arm yourself with as much knowledge as possible so do plenty of research into the mortgage deals offered by all the banks and building societies out there. You`ll also benefit from speaking to an independent mortgage broker as they can help explain the deals that are on offer as well as identify what kind of mortgage options and rates work best for your own personal circumstances.

Consider All the Property Options

The options available to you in a buy-to-let investment are not limited to the local area surrounding your own home. Of course, it`s nice to be close to the property you purchase so you can keep an eye on it, but there might be much better deals waiting for you further afield. And remember, if you were considering using a letting agent to handle affairs for you anyway, then that pretty much opens up the entire country as potential investment areas. So look beyond your own local area, especially in places with good transport links for commuters. Also keep in mind areas with a medium to large university, as these towns and cities tend to have plenty of potential. Another option is to buy a run-down property and do it up, which means you can make savings on the mortgage but still make good rent yields once the property has been improved. Of course, buying property to make it over is a whole new subject that we don`t have enough space to cover in this article, but it can certainly be worthwhile looking into.

Keep Your Ambitions Grounded (At First)

Many buy-to-let investors are hoping for an increase in capital growth, but it`s far more advisable to simply rely on the rent yield as a source of income. The idea is to build up the rent over time, which you can then use as a deposit for even more investments (if expanding your property portfolio is a future ambition of yours), or even just to pay off the mortgage you have on the first and only buy-to-let property you own. By doing that, you will have paid off the mortgage while still benefitting from the rent yield and yet now you own the full capital of the property. By keeping your ambitions grounded at the beginning of your buy-to-let venture, you can be a lot more certain of success further down the line.

Hopefully this three-part advice guide for new buy-to-let investors can set you on the right track to knowing if it is the right venture for you, and if so, how to go about getting started and making the best of your investment.
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