Buy-to-let property advice and checklist
For investors with surplus funds, buy to let property can be an attractive investment, especially with rent prices increasing due to the lack of people getting mortgages. Buy-to-Let property checklist:
- Money: Ensure you have sufficient funds to keep re-paying the mortgage even if the property is empty, also remember that lending rates change, and if they go up, your monthly repayments will follow.
- Research, research, and guess what, more research. If you are new to the business, you should be going the extra mile to know everything you possible can about the area you are investing in. That includes the neighbourhood, local town, transport links, schools, employment opportunities, crime statistics the list goes on, lucky you can find all types of neighbourhood statistics using HoodPoints.
- Risk: Buy-to-let can make you money, but it can also lose you money. Know your risks and know your limits!
- Location: Make sure you invest in the right location. Take advantage of HoodPoints, and find the best streets, roads and avenues in the area you are looking to invest in.
- Maths: Do your figures, not once, not twice, but thrice. If you have a handy family member, or friend who is good with numbers, run all your figures by them. Two heads are better than one!
- Compare: Shop around for the best mortgage deal. Do not just ask one bank! Read our useful blog post on mortgage advice.
- Remember: This property is not for you. Don’t buy a property just because you like it, you may think a bachelor pad is pretty awesome, but would a young family? Consider the type of people you are trying to “sell” this to.
- Insurance:Get renters insurance. This covers you if your tenant fails to pay rent, or damages your property.
- Negotiate: You are in a good position as you are not in a chain, buyers that are ready to move quick are the type of buyers sellers want.
- Repeat: Again, go through the pro’s and con’s to buying a property to rent out. If its empty for five months of the year, could you handle that?
- Letting your property: Find a fixed fee letting agent, do not pay more than one months rent for their services.
Turns out we will be moving home 8 times
According to a study from Bosch power tools, the average Brit ends up living just over 60 miles away from their birthplace, and on average we will be moving home 8 times during our lives. The study also shows that the main reasons for moving are, up-sizing, work relocation, and wanting to move away from place of birth.
Did you know?
Over half of Brits try to increase the value in their property by re-decorating before they list on the market, the most common home improvement is a new kitchen. 7/10 people thought doing these alternations helped with the sale of their home.
Buying property V renting property
What is better, buying property or renting? Some point in your life you will ask yourself this question, the answer usually lies with your circumstance, and of course the state of property market.
When the property bubble burst in 2008 it completely turned the standard belief of owning a home is always better upside down. After all the property prices fell, many people were left with a mortgage debt that was larger than the value of their home, and thus rented accommodation became the in demand living style. Here is a list of Pros and Cons!
Benefits of renting
- Lower upfront cost. Usually 1-2 months’ rent upfront against having to pay a heavy deposit on your home, plus the solicitor’s fees.
- Invest in something else. Whether it be the stock market or a business opportunity you have the freedom to invest.
- Fancy a change of scenery? Within a month you can be gone and in a new place. With a mortgage you are there for at least 3 months and that’s if you already have a buyer in place. Not to mention the expense of solicitors fees.
- Uncertain of your income. If you are a businessman working for yourself, some years you may earn more than other years. Renting you can adjust your living accommodation according to how much money your making.
- Zero Maintenance. This does not always apply, but in most cases if anything goes wrong, it is at your landlords cost.
A few disadvantages, limited in re-decorating your property, price may increase subject to the landlord, and obviously you don’t get any equity in the property.
Benefits of buying
- Equity Building. When you buy a home with every payment you make you are increasing the amount of equity you hold in your home. You can also borrow against your home and use it as collateral.
- Freedom. It’s your home, if you want to build a skate ramp in your living room then go head!
- Pride of Ownership. Some people like the idea of owning their own home.