With buy-to-let investment expected to drop off severely after the stamp duty rise last April, it is still seen as a potentially rewarding investment if you find the right property in a good area. Obviously, what makes a property ‘right’ and an area ‘good’ involves a lot of variables, but if you were thinking of buying-to-let before the stamp duty increase, it doesn’t mean that it’s now a terrible idea. Take a look at the following tips for new buy-to-let investors.
Research All Your Options
This one is especially important if you are new to buy-to-let investment. While you probably already understand the benefits (they are presumably what got you interested in buy-to-let investment in the first place), you must also understand the risks as well. It’s also worth researching whether or not your money might actually earn you more in another venture. For example, a high rate savings account would have made you some reliable money a few years ago, though the rates are lower these days, but something like that can be more of a sure thing considering that property values run the risk of falling. So do thoroughly check out all the options you have available to you before taking the plunge with a buy-to-let property purchase.
Identify an Area with Potential
An area with potential is not necessarily cheap, nor is it expensive or anywhere in between, but simply somewhere where there will be constant and continued interest from people wanting to live there. This could be for a variety of reasons such as a special attraction in the town, or great employment opportunities. Look for things like good transport options and useful local amenities. If you want to invest in a family-sized property, then search in areas close to a school.
Calculate Your Costs in Advance
This one is bad news for anyone who has a phobia of sitting down with a calculator and doing a whole load of mathematics. However, it’s crucial that you figure out all your costs before embarking on a buy-to-let adventure. You may also have to do this several times for different properties in different areas. You’ll need to know what your mortgage lender is demanding in terms of how much rent you’ll need to charge above the monthly mortgage repayments. Plus there has been a recent increase in many deposit demands, so speak to who you need to speak to and get their numbers before calculating exactly how much everything will cost. Make good use of any number of online mortgage calculators to help make the job a little easier.