Is it any surprise to see so many people deciding to invest in buy to let property given the volatility of the UK stock market?
Here are a few questions and pointers that will help you avoid buying the wrong property.
- How are you going to select suitable properties and broker deals? Take local letting agent’s advice on suitability not the estate agent. Remember the estate agent is paid by the vendor. Too many investment buyers trust the estate agent.
- Is the property attractive to the eye, or at least one of the most attractive on the street?
- Location – make sure you are not relying on just one or two sources of tenant supply i.e. hospital or college; should a major change occur you may struggle to let the property.
- Buy a property that has scope for you to let as rooms in the future. This will help insulate you from possible future high interest rates
- Target the tenant market you are happy with – remember just because they are claiming benefits doesn’t make them irresponsible – employed people can become unemployed the day after the tenancy starts!
- Type of property (new or used), avoid solid wall houses unless you are good at property maintenance or you could face unnecessary expense.
- What funds will be needed for improvements and presentation? Budgets nearly always finish higher than planned. The property needs to be the best in the area if you want to let quickly.
- Are you going to buy with cash or a mortgage? Spreading your cash across several properties will enable you to benefit from capital growth.
- Investigate asset protection and take wealth advice. It may sound grand but you should plan your exit route before you buy it, tax avoidance is legal but it requires you to plan ahead.
- Negotiate with the vendors to allow rental viewing access during the purchase period.
- Agree on a condition statement that the vendors will leave the property at completion.
- Have the electricity supply and heating tested before instructing lawyers to start conveyance.
- Start to advertise for tenants during the purchase period.
- Agree who will check the condition of your purchase at completion, vendors are always in a rush to disappear and you can guarantee there will be a few nasty surprises.
Take care to select a professional letting agent to market and manage your buy to let investment. A professional letting agency will be a member of the Safe Agent scheme or a member of ARLA (Association of Residential Lettings Agents). It is a requirement for a member of Safe Agent and ARLA to have Client Money Protection and have their accounts audited annually. If you are considering using an agent that is not a member of Safe Agent or ARLA ask yourself a question, would you think would have an operation carried out by an unqualified surgeon?
This article was prepared and written by Terry Lucking who is a leading Cambridge lettings agent. Terry offers free advice and free property reviews to all investors who are considering buying. Terry Lucking is Managing Director of Belvoir Property Lettings the leading residential lettings agents in Cambridge. In addition to lettings he offers comprehensive Buy To Let Landlords Services. He can be contacted on +44 (0) 1733 574060, email firstname.lastname@example.org