Investing in a Buy-to-Let Property

Investing in a Buy-to-Let Property

Good news: buy-to-let investments can still pay off more than low-interest saving’s accounts and a volatile stock market. Buying for your children in the future, supplementing your pension or maybe you just prefer tangible investments, these are still great reasons to be interested. Even with pending tax increases, there are still ways to make these real estate investments worth it if you do it correctly, even if you are an amateur landlord. One thing to keep in mind is that although investment rates are low right now they will rise in the future. Can your new property stand the test of time? The key is to look at it as a long-term investment.


Here are some things and questions to consider before investing in a buy-to-let property.


Do your homework.

Are you aware of the potential advantages and disadvantages? Is a high-rate savings account going to return more than an investment property for you? Do you mind having your money tied up for a long period of time?

Know where you want to buy.

Is it an attractive place to buy a home? Will people want to live there? Are there good schools? Convenient transportation?

Look at the numbers.

Will your buy-to-let property return an average of 145% on your mortgage repayment? Do you have a 25% to put down on the property initially? These are typical numbers for buy-to-let lenders. Also, remember to factor in maintenance costs and the amount of time it will take to rent the property where you’ll be paying the mortgage yourself.

Are you prepared to cover the survey and solicitor’s fee? How about the stamp duty land tax?

The stamp duty land tax is a 3% surcharge meaning landlords buying a home for £200,000 need to pay £7,500 in stamp duty – compared to £1,500 before the changes.

Think about your tenants.

Are you the same type of person that would want to live in your property? If not, being able to see your place from your tenants perspective will help tremendously. Ask yourself. What is important to them? What style would they prefer?

Look outside your neighborhood.

Where do young families or students live? Casting a wide net and looking for properties that need a little extra love is a great place to start looking for a buy-to-let property to invest in.

Your involvement.

How hands-on do you want to be with the property? Will you be employing an agent? There are pluses and minuses to both. Having someone handle the day to day and details might be worth it but their fee is an added expense.


Are you purchasing landlord insurance? What about building insurance? Remember there are a lot of things that can go wrong and the kinds of consumer protection that covers most investments don’t apply to buy-to-let properties. So it is essential to find out everything you can before you commit to a property and a mortgage.

Can you answer all of these questions? Well, then you are off to a great start. Good luck with your new buy-to-let property investment.


Ben Ashworth

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