At a time of low rates and stock market volatility, investing in buy-to-let property seems an attractive idea to many. And whilst there is still a lot of money to be made when investing in property, it’s important that a number of different factors are taken into consideration in order for it to be successful.
Research the Market
If you are new to buy-to-let, it’s important that you take into consideration what you already know about the market. Are you aware of both the benefits and the risks? You should do enough research to make sure that buy-to-let is the investment that you want, as you might find that your money could do better in a different investment type. An investment in buy-to-let typically involves taking out a mortgage, as well as committing to invest thousands of pounds into a property. Although property investment has paid off well for many people, it’s important that you go into it with your eyes wide open and fully acknowledge both the advantages and disadvantages.
Choosing a Promising Area
An area that is promising does not mean that it has to be the most expensive or even the cheapest. Promising areas are areas where people would like to live, and this could be for a variety of different reasons. Choose a place which tends to have a special appeal, and fits the requirements and needs for your potential tenants. In most cases, people who invest in property tend to do so close to where they live themselves. The plus side of this is that they will already have a good idea of the local market, and know which types of locations and properties will do well.
Shopping Around
When planning to make an investment in the buy-to-let market, it’s important that you shop around in order to get the best mortgage. Don’t just simply walk into your bank and ask for a mortgage, as this is just one of the reasons why banks are able to make billions in profit. Instead, speak to a financial advisor or a good independent broker when looking for a mortgage, or visit a hard money lender who specializes in property investments. By doing this you will not only be able to get advice and guidance on the deals that are available, but the broker will also be able to help you in weighing up which is the best choice for you and whether to fix or track.
Target Tenants
Instead of imagining whether you yourself would like to live in an investment property, it’s important that you put yourself in the shoes of your target tenant. Ask yourselves who they are and what it is that they are looking for. For example, are they students, young professionals, or families? Different types of tenants will have different needs and requirements. Letting your tenants make their own mark on a property will also make it more attractive to them as it will feel more like home.
What are your views on property investment? We’d love to hear from you in the comments.
