Property Investing - Considering buy-to-let?
Buying property to let as a long-term investment and to generate an income has become an increasingly popular option over recent years - especially at a time of low interest rates and stock market volatility, as demand from would-be tenants of rental property continues to grow in many areas of the region.
A buy-to-let investment has the potential to generate an income as well as capital growth, but it is vital that you do things right.
Whether you’re looking at a single property or building a portfolio, the property team at Moore Allen & Innocent can advise and lead you through the entire process regarding your property search and purchase as well as the subsequent letting, management and accounting. Below are some factors that you will need to consider to avoid the pitfalls and maximise the opportunities:
1. Research the Market
- Carefully research the local market and tenant demand in the area you intend to buy.
- Establish the tenant demand and the most sought-after property size, style and type of property required.
- Consider local amenities and main lines of communication and employment which will all help to ensure your property is let quickly - choose an area where people want to live.
- We are happy to assist in providing the advice and help to ensure you purchase the most suitable buy to let property.
- Do not let personal taste cloud your judgement.
- Get your sums right. Will the rent cover borrowings and costs after allowing for void periods?
- As a landlord you will continue to be responsible for maintenance costs, servicing of fixtures and fittings to include boilers, buildings insurance etc.
- It is best not to purchase a property that will require lots of ongoing maintenance.
- What will be the cost of refurbishment prior to letting? the less you have to do, the better.
- Do not be over ambitious and go for a realistic yield and capital growth - always think of Buy to Let as a medium to long term investment.
- If you intend to borrow, ensure you choose a mortgage that best suits your current and future needs.
- Take advice from an experienced independent mortgage advisor.
- You will need money to cover upfront costs to include deposit, legal fees, stamp duty etc.
- The income from renting properties is taxable but you will be able to offset some of the costs you incur as a landlord to include:
- Repairs and renewals
- Agency Fees
- Insurance premiums
- An element of mortgage interest payments
- Accountancy and other professional fees.
- If and when you decide to sell your Buy to Let investment the proceeds may be subject to capital gains tax
- There have been many recent changes to the way in which a buy-to-let investment is taxed and you must ensure you are fully aware of these. Visit www.hmrc.gov.uk for more information.
As a Buy to Let landlord you have obligations to your tenants and need to comply with certain regulations to include:
- Gas and electrical safety
- Repairing and maintenance obligations
- Fire safety of furnishings
- Deposit protection
- Tenancy agreements and notices
- Energy performance certificates (EPC's)
- As bonded agents of ARLA and the RICS, we are required to work within the best Codes of Practice and have qualified members of staff. Our landlords benefit from the decades of experience in advising landlords and managing tenancies.
- You will need to decide how you want your property managed during the tenancy. We can offer a number of tailored services to suit all requirements.
- Many Buy to Let landlords require a fully managed service so that an experienced third party is handling all aspects of the letting and management of the property including collection of rent and end of tenancy matters.
- You may wish to manage the tenancy and property yourself and therefore prefer our Rent Collection or Let Only services. To find out more about our services please call us or visit Landlords Letting and Management Services.
We have significant property experience and will take time to assist you from start to finish providing honest and reliable advice on potential investment opportunities. We recognise that it is likely to be your second biggest investment after buying your own home, and as such is taken seriously.
If you would like any further information or assistance, please do not hesitate to contact us for a no-obligation discussion on 01285 648 113 or email: firstname.lastname@example.org.