|
The buy-to-let property market
has really taken off in the last few years, the result
of a combination of more stable mortgage rates, legislation
that is now more favourable to landlords, and many
more lenders being prepared to offer mortgages on
buy-to-let properties. (Source: Paragon)
Buying a property to let requires
you to step back and make unemotional and informed
decisions about your purchase. It may not be what
you would look for in a home yourself.
Long-term project
If you are actively looking to invest in property,
you should certainly treat it as a long-term project.
Buy-to-let doesn't stop at just buying a property.
Once you own it, there are legal obligations to keep
it in good order, which costs money. You have to make
sure your purchase will be viable.
Consult an agent
Consider consulting a letting agent before taking
the plunge. A local agent should have specific knowledge
about the rental market where you are thinking of
buying. An agent should also be able to tell you whether
there is a need for more rental accommodation in the
area, what types of properties are the most popular
and in which precise areas. In addition, an agent
should be able to deal with the tenancy agreement,
tenants' references and the day-to-day problems that
inevitably arise.
Arranging a mortgage
There are numerous lenders that offer buy-to-let products.
Many lenders offer mortgages for people who want to
invest in property and become landlords, including
specialist buy-to-let lenders. These buy-to-let mortgages
are similar to traditional products, but interest
rates tend to be higher because the perceived risk
to the lender is greater. Your deposit is likely to
be higher as well, as most lenders don't offer mortgages
of more than 80% of the value of the property.
You don't have to be a high earner
to invest in property – as well as your salary,
the lender will take the expected rental income into
account when it calculates whether you can afford
the repayments.
The expected rental income must
exceed your mortgage repayment by a certain set percentage,
the level of which depends on the lender. Some lenders
only consider rental income, while others also take
into account your normal income. The requirement for
rental return might be anything up to 150% of the
mortgage repayment.
Some buy-to-let schemes offer you
the chance to buy more than one investment property.
It is not unusual for borrowers to buy properties
one by one, taking advantage of price rises to remortgage
the previous property in order to raise a deposit
for the next.
If you are considering purchasing
a property to let or would like to add to your existing
property portfolio, please E-mail
, use our mortgage
request form, or contact us on 08000 151613
today.
|
