Buy To Let Guide For Beginners
|Author: Craig Bees||Published: 14th November 2017 15:22|
Buy To Let Guide For Beginners
Why be a landlord?
Provided you have bought a suitable property and have a good managing agent, the amount of effort required from you is quite limited.
Whatever your occupation, your income is always limited to the amount of hours that you can work in a day but with property, that limitation is not a consideration; some landlords with very large portfolios do very little, yet make more than most hard working individuals.
The expansion of their property portfolio is often made possible by refinancing one property, which has risen in value, so as to release equity to fund further purchases. In turn the same applies to the newly purchased properties and so the business grows.
So where do you start and what do you look for?
Yield or growth?
There are two ways that landlords make money from property: the yield, which is the difference between the rent and the outgoings, and the capital growth, which is the amount that the property value has increased by.
At the extremes for example, some towns in the north of England can offer potentially large yield but little or no capital growth. Conversely, central London can offer a very tiny yield, often not covering the rent but investors go there in the hope that London house prices will always be jumping up at some point and this has proven to be a sound strategy for some.
Where To look?
An ideal location should provide a good mix of both income yield and capital growth. The capital growth provides the ability to grow your portfolio
This is where commuter towns win, as there will always be demand from professionals.
Be reasonable. If you can get a great deal then you should but in a busy market you may find that there is little room for negotiation.
Many buyers come to us looking for a property at a price point that is unrealistic. They often return a year later regretting their earlier stance, resigning themselves to buying a similar property at a higher price.
Some unwise investors end up being seduced by a property with amazing potential returns. Often reality starts to hit as they speak to agents and realise that the figures provided by the sales office were at best optimistic and, at worst, misleading.
When you are not achieving anything like what was originally promised, it is too late.
Do your homework
Due diligence is key. Don’t just take the developer’s or selling agent’s word for it when it comes to rents: Speak to local and unconnected estate agents.
Get the paperwork right
Lettings legislation is a minefield for a newcomer and constantly changes but with the right advice shouldn’t put you off. One recent month saw five major changes to legislation! Take care that you have obtained good advice in this respect.
If you have done your homework and bought wisely, you will be in a great position to invest further and set your future up nicely as values and rents inevitably rise.
Listed Buildings: Thanks for all the people who contacted the office about this subject, good to hear from you. If you have any queries about buy to let call us on (01327) 359164 or e-mail me at firstname.lastname@example.org and we will do our best to answer your question.
Monthly draw: your chance to win a case of Italian wines (red/whites/mixed) or one month’s membership to Whittlebury Hall Leisure Club.
How To Enter: Every valuation and instruction for sale or rental between now and Thursday November 30 will be entered into the draw, the winners being notified by e-mail.
So if you’re thinking of selling or letting your property and want to win one of these great prizes on offer call (01327) 359164 and speak to our sales or lettings team.
Towcester Property News: November issue out now. Delivered free to all Towcester households, extra copies at Tesco and Co-op.
Until next time.
Craig Bees, MD Bartram & Co
E-mail me at email@example.com
Visit our website www.bartramandco.co.uk and follow us on Twitter@bartramandcotow
Tel: (01327) 359164 Fax: (01327) 359166