There are many things to consider when buying an investment property we have put together starter list to help you on your way.
It’s vital to start with the end in mind, otherwise how do you create a plan to achieve your aims? Are you investing in property for income, capital growth, as a pension hedge, or as a legacy for your children? What sort of income and/or capital growth do you need to achieve this goal?
Asking these questions will help you create a bespoke investment strategy that is right for YOU! It is never a case of “one size fits all” in property investment, so make sure that you ensure that your goals are going to be realised. Otherwise you will just scatter-gun around and make make poor choices.
We recommend that any investor in BTL takes a long term view – a minimum of 15 to 20 years – so you need to think long-term not short-term.
Unless you are a cash buyer, you will typically be looking to lend up to 75% of the cost when buying an investment property from a mortgage lender.
As BTL lending criteria is becoming more strict, it is important to speak to a mortgage broker to find out which financial products you qualify for.
It is also helpful to be “pre-approved” for lending, so that when you put an offer in on a property, you can use your status as having finance in place to perhaps make your offer more attractive, and even secure a better deal as a result of being able to complete quickly.
As a landlord, you take on the financial risk of the tenant not paying the rent and the risk of not securing a tenant for your investment, this is one of the most important things to consider when buying an investment property.
There really is no point in buying a BTL property in an area of poor tenant demand.
Therefore you need to assess the tenant demand and buy a property that is going to be popular with tenants and that will generate income from Day One of ownership. having a good relationship with your letting agent.