The 2nd in our 5 part series on Buy to Let. Below is a 5 point guide on how to source your Buy to Let property.
Whatever your objectives are, there are some common factors.
- Firstly make sure there is a lettings market. The number of agents around will be a guide as to stock levels. There will be developers offering properties cheaply outside town centres, but you may be excluding potential tenants without a car.
- If you’re going for capital growth, best stick to the established areas which can appeal to singles, couples and families, certainly for your first purchase.
- For rental income, cheaper areas close to the centre can be decent money spinners/ good money earns (a bit more formal). A good local ex local authority property will fit into this category.
- You then need to do the maths. As a starting point, assuming you are getting a 25% deposit, a rental income of £550 per month for every £100k borrowed that will stack up for you and most lenders, to allow for a period when the property may not be let.
- As with all properties, you as leaseholder will need to check whether the remaining lease is at least 90 years so you minimize lease extension charges and the monthly service charge payable.
By Simon Murray, Financial Consultant Your Move Surbiton