If you are new to property investment then you are in the right place as we can guide you through what you should be looking for.
When you invest correctly in property, it can be hugely rewarding. But, it is important you do your homework before jumping into any transaction and to make sure it is worthwhile.
It can feel like a daunting topic to get your head around especially as there is so much legalisation to stay on top of. We will try and make it as simple as possible for you.
What is a buy to let?
A buy to let refers to taking out a specific type of mortgage on a property where you intend to rent the property out to a tenant. You will not live in it yourself it is an investment. By letting out this property in turn, you become a landlord. You therefore have responsibilities in this regard.
If you are thinking about purchasing a property using a buy to let mortgage, you should perhaps ask yourselves the following questions;
Do you have the time to be a landlord?
You will need to be realistic about the time available for you in your existing schedule to manage your property. However, we can take this away from you and manage it so you have complete peace of mind.
What are your legal responsibilities for owning a property?
There are over 150 laws now that apply to landlords when a property to let comes on the market. It is exceptionally complicated which is why it is important that you have us to ensure that you not only purchase the right property but are able to stay on top of the legalisation.
Ensure the property stays in good condition.
You are now a landlord and you are required to ensure that the investment property stays in sound condition and take care of any buildings that are required. This includes but is not limited too fixing any structural damage, roof repairs and maintaining the exterior paint work. Obviously, this is different if you are on a leasehold property.
Landlords are now responsible for gas safeties when they own a property. They must make sure that the gas equipment is safely installed and maintained by gas safe registered engineers. They must also have a registered engineer doing an annual gas safety on each appliance and flues. A copy of the gas record must be given to each of the ingoing tenants before they move in and any subsequent renewals within 30 days of this being carried out. You should keep the gas records for a minimum of 2 years if not longer.
Carbon monoxide and smoke alarms.
Since the 1st October 2015, when properties are occupied by tenants, a landlord must ensure that a smoke alarm is fitted on every floor of the property in which a room is used wholly or partly as living accommodation. A carbon monoxide alarm in any room where solid fuel burn is used. This now includes boilers. Checks must be made by us to make sure each alarm properly works on the first day of the tenancy.
Right to rent
Under the immigration Act you are required to ensure that your tenant has the right to rent in the property. Why not read our article here.
Landlords have the legal duty to ensure that their rental property and any electrical equipment provided is safe before a tenancy begins and throughout the duration. They must ensure that the electrical systems is safe and all appliances they supply are safe. Landlords should provide tenants with a EICR, click here for more information.
There are various other regulations and don’t hesitate to read any of our articles on these.
Do you have your finances in order to purchase a property?
Just like buying a property to live in, you will need to ensure that your finances are all in check before looking to purchase a property to rent out. It is important if you are looking for a buy to let mortgage or other financing options. What many people don’t take into account is that it is really important to ensure and understand your own tax position. We often find that people don’t realise that they will need to pay tax on any income they receive from their buy to let. Sometimes even purchasing a property with a mortgage and then taking into account your tax position may mean that in real terms it gives you very little income. You may not be buying it for income in the first instance, you may be buying it for capital growth.
Are you interested in yield or capital growth?
Rental yield is the actual return you get from the money you have invested. Capital growth is where you look to increase the capital value of the property. However, you need to realise property goes down as well as up and it is therefore so important to understand what you are looking for in your investment.
Where and what would you like to buy?
Do you want to buy a property near where you live or the other part of the country? It is very important in our personal opinion that you buy a property that is local to you. We have had investors in the past purchase properties all over the country but they have found they didn’t take into account the travel as well the cost in this regard.
What properties can we purchase?
New build property.
This will have an NHBC Warranty, a two year appliance cover, sometimes has developable incentives. Will have no remedial works and a potential yield scheme. Ie they give you a guaranteed income from the date you purchase it.
Re-sale property or often known as property on the current market
This could be property accessible for all budgets, has a monthly yield, a capital growth and no waiting time for the property to be built.
These can sometimes produce high yields but they are diversified in risk. Especially when they are multi tenanted properties. They are potential tax benefits as well as long multi year leases makes income more predictable.
Contact us to discuss what you are currently looking for in this regard.
Why not look at our current properties for sale here.