Buying a property to let isn't as straightforward as some may
think. Buy to Let is very different from buying your
Top 10 tips for would be Buy to Let landlords
There is a certain kind of dinner party where the favourite
topic of conversation is who has invested in a buy-to-let
investment property, who has yet to take the plunge, and where the
next best place to become a landlord is likely to be. Yet
buying a property for investment purposes is very different from
buying a home, and there are a number of hazards to avoid.
Following these top 10 tips below will help.
- Do some research. Buy to let can be a legal,
practical and financial minefield, and you will need to do your
homework. Research the market, with the help of your local
NAEA estate and lettings agents, who will be able to advise on
demand and any other issues in the area you are considering.
- Know the demand. Buying where there is no
rental demand can be fatal to the buy to let investor, yet it is a
surprisingly common mistake. Make sure you are not investing
in a market which is already saturated with the sort of property
you have to offer, and do not be misled by stories of fast
- Understand your finances. Keep in mind whether
you are in the market for capital gain when you sell or simply
monthly rental income. This will help you decide what to buy
and where, and what kind of mortgage you need.
- Buy carefully. Make sure you buy a property
which allows for sufficient profit margin. Do not go for a
'bargain' property which may turn into a money pit very quickly.
Major repairs require much time and effort and paying more
for a property which is in better condition can be a wise
- Decorate to demand. Don't make the mistake of
decorating and furnishing the property to your own tastes - keep it
simple, with clean lines and do not fall into self indulgence.
You are there to make money out of the property, so keep your
market in mind but do not treat it like a dolls house.
- Check for safety. By law you must make sure
that the property you are letting complies with various safety
regulations, like furniture and furnishings fire safety, gas
safety, electrical equipment safety and that it contains a smoke
detector. You'll also need certificates to prove these
regulations have been met.
You need to be aware of new and updated regulations as and
when they arise. Failure to comply with the law can result in
serious consequences. The best way to make sure you are kept
up to date is to use an NAEA agent who can make you aware of them,
while also ensuring you comply.
- Know your responsibilities. You, your letting
agent and your tenant have different responsibilities, and it is
important to know where these lie. As the landlord you will
be expected to pay buildings insurance, ground rent and service
charges and insure any items you leave in the property. Your
letting agent will be able to advise on others' responsibilities as
part of your contract.
- Prepare for voids. Your property may be empty
and not generate any income for periods of time, and you need to be
ready for this. Advertising for new tenants, painting walls
and replacing carpets can take months off your lettings calendar
and you should have a plan in place for when this happens.
- Move with the market. Know that, if the market
softens, you will have to lower your rent in order to stay
competitive, no matter how desirable your property. If you
are in it for the long term this should not matter, as the
important thing is that your property continues to generate a fee
- Recruit a managing or letting agent. Knowing
where to advertise your property, how to vet your tenants and the
kind of lease you should use can be tricky if you have no
experience. Being a landlord is a full time responsibility, 365
days a year and is best not left to friends or family. A good
agent who is affiliated to the NAEA will find tenants, do
background checks, draw up the lease, collect rent, and inspect the
property, thereby removing much of the hassle involved.