13 February 2019
Jacqui Sinnetta Lettings Manager of Goadsby Estate Agents in Salisbury provides some Tips for potential Landlords.
Research the market on buy-to-let
Investing in buy-to-let involves committing thousands of pounds to a property and typically taking out a mortgage. It is essential that you go into it acknowledging the potential advantages and disadvantages. Speak to someone who has already invested in buy-to-let or have let a property and ask them about their experiences.
Choose a good area to invest in property
You need to match the kind of property you can afford and want to buy with locations that people who would want to live in those homes would choose.
Do the maths on buy-to-let
Write down the cost of houses you are looking at and the rent you are likely to get. Work out your monthly payments and don't forget maintenance costs. Also, what will happen if the property sits empty for a month? Make sure you know how much the mortgage repayments will be and allow for rates to rise.
Think about your target tenant
Instead of imagining whether you would like to live in your investment property, put yourself in the tenants’ position. Who are the Tenants and what do they want? If they are students, it needs to be easy to clean and comfortable but not luxurious. If they are young professionals it should be modern and stylish but not overbearing. If it is a family they will require space for their own belongings etc.
Ensure you have the correct insurance
As the owner, you are solely responsible for insuring the structure of the property, which will include permanent fixtures and fittings. Check your insurance policy as many building insurance policies exclude buy to let properties. In addition to insurance you will need to comply with fire regulations, to include installing smoke and carbon monoxide detectors.
Any profit you make when you sell the buy to let will be liable to Capital Gains Tax (CGT) charged at the highest rate of income tax. Tax can vary according to your individual circumstances. It would therefore be wise to seek professional advice from your Tax office.
Look further afield or doing a property up
Most buy-to-let investors look for properties near where they live. But your town may not be the best investment. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent anyway they should do that for you. So maybe cast your net wider and look at towns with good commuting links that are popular with families or have a sizeable university. It is also worth looking at properties that need improvement as a way of boosting the value of your investment. Tired properties or those in need of renovation can then spruced up to add value.
If you would like any information on Letting a property please contact Lettings Manager Jacqui in Goadsby Estate Agents Salisbury on 01722 343343.