Top Ten Tips For Buy-to-let

April 14, 2009 - PRLog -- And, inside of watching a house sit empty for months on end, one of the opportunities that continues to appeal to budding property entrepreneurs is buying to let.

Gail Atkinson, director of Whitegates Lettings and based in West Derby, says the Buy to Let market is doing ‘incredibly well’, and as a landlord herself, she has personal experience as well as industry knowledge.

We asked Gail for her top ten tips when it comes to Buying To Let:

Do your research

If you are considering purchasing a buy-to-let property, make sure you do as much research as you can. You should think about whether buy-to-let really is the best option for you. As I am a landlord myself with a portfolio of properties, it definitely helps when talking to people thinking of buying to let as I can share my personal experiences as well as my professional knowledge.

Make sure your property suits the area it is in

If you are looking to get a buy-to-let property in the suburbs, for example West Derby, you should definitely look at buying a house, as that is what people will want. Unfurnished is the best option as in the majority of most cases, people will have their own furniture from their last home. Alternatively, if you want to buy property in the city centre, apartments are the number one choice. When it comes to furniture in this case, furniture packs are always a useful buy.

Find the right agent

Forming a strong relationship with an agent is number one priority so try and find an agent who knows your target area well, has a database of possible tenants and can collect your rent for you, so you don’t have to. Also, make sure they are fully qualified before you sign any form of agreement with them. ARLA, the Association of Residential Letting Agents, is the only professional self-regulating body to be solely concerned with lettings.

Don’t spend more money than you have to

If you are a first time property investor, you should not spend time and money refurbishing a property if it isn’t needed. Make sure your property is clean and neutrally decorated, to suit as many tastes as possible. Personalising your property can put off potential tenants; let them feel that your property could be a blank canvas for their new home. Also, because of the current climate, people cannot afford to buy property so they are renting; thus they have furniture meaning you don’t have to buy any. 90% of our properties are currently unfurnished. I would advise though that all properties have their white goods.

Think about your tenant

When looking at a property, many investors imagine how they would feel living there. This is a mistake. Put yourself in the shoes of the tenant- what are they likely to want? If it is a family, they will want a blank canvas with lots of space. If it is a student they will want somewhere that is easy to get to from several locations, comfortable but not luxurious and a space which is easy to maintain. When choosing the tenant, this is the job of your agent who will do all the security and credit checks and handle everything for you once the contract is signed.
Make sure your numbers add up
It is easy to become too excited when looking for a buy-to-let property. After you have looked at your favourite potential buys, write down the cost of each one and try to work out the likely rental income they will get. You should also remember that buy-to-let lenders often require a deposit of around 25% and 30% and rental income to cover 125% of the mortgage repayments.
Don’t be afraid to negotiate

As you are a buy-to-let investor, you are in a good position as you are chain free; you have the same advantage as a first time buyer. This can be a good asset when negotiating a discount. Plus, if you know a property has been on the market for 12 months and has had no interest or offers, you should expect as least 20% off the price.

Be realistic  

More than enough times I have heard of people getting a property, putting it on the market too high and sitting there watching it remain empty, meaning they make no money. It is essential that you are realistic about how much your property is worth. For example, if you put your house or flat on the market for £550 rent pcm and you get no interest, you are going to lose out. Whereas it is better to start at £500 pcm as you know more people will be attracted to it and it will have a tenant in it from month one.

Have a look around

When it comes to asking for a mortgage, don’t just walk into the first bank you see and sign something there and then. Many people do this when really they should take their time, negotiate a good deal and compare the financial options that are out there, for example, dedicated buy-to-let mortgage brokers who can help you.

Take one step at a time

It’s easy to get carried away when thinking of the possible incomes attached to buy-to-let properties, especially when most of us have read about someone who has made millions from the market. But, statistics suggest that the days of double digit price rises are over, meaning that focus should be placed on the bigger picture. Allow your properties and rent income to grow over time, helping to create the possibility of additional property investments.

Gail Atkinson is Director of Whitegates Lettings in West Derby. She has worked at the branch since 1989 where she started as a junior. She bought the franchise in 2001.

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