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I’ve been writing about the buy to let market for ten years. So here are my ten tips on successful buy to let investment.
Get the right mortgage. There is a huge gap between the best and worst deals. The cheapest often come from the least-known lenders and it can take an experienced broker to track them down. It really can pay to get professional help through the mortgage maze.
Watch out for the fees. Some low rate buy to let mortgages have very high set-up costs. Do the sums carefully to see if these are worth paying. Get a complete picture by adding up the total costs including the initial fees plus, say, a couple of years of monthly bills.
Don’t follow the crowd. You’ll face a lot of competition for tenants and may have to cut your rents if you buy in a development dominated by landlords. Diversifying into another property type can make more sense.
Don’t buy blind. Investors can come unstuck by buying properties off-plan in places they haven’t even visited. The glossy brochures might look great but you can’t beat local knowledge. Don’t buy without detailed research.
Keep on top of your solicitor. I’ve heard too many stories about purchases being delayed by snail’s pace conveyancing. Expect to face annoying delays and don’t be shy about calling your solicitor every week to ensure they aren’t letting things slip.
Think laterally when you look for tenants. Lots of successful landlords say they get dependable tenants by advertising at work as well as using a lettings agency. Get friends and family to advertise at their workplaces as well.
Don’t skimp on insurance. Buy-to-let investments need protecting. Even if you let unfurnished property you might want to insure the fridge, cooker and other fixtures and fittings. It’s also worth considering rent and tenant insurance as well.
Stay friends with your estate agent. A good agent is invaluable if you plan to build a property empire because they will tell you about new instructions as soon as they come into the office. Woo them to get an important head-start on the market.
Don’t let your mortgage go stale. Shop around up to three months before any fixed, discount or special rate expires so you never pay your lender’s high variable rate.
Expect the unexpected. I could write a book on the horror stories that can turn a property dream into a nightmare. Most of them cost money to put right – so build up a war chest of cash for emergencies just in case.
Neil Simpson is a former Personal Finance Journalist of the Year and writes regularly on mortgage issues for the Mail on Sunday and many other publications.
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