Buy to Let Investment – 5 Pieces of Advice

1. Curb your ambition
Forget about the kind of huge capital returns trumpeted by the reality TV programs just a few years ago. The UK market has re-adjusted – some would say realigned to be more reasonable, and do not expect massive capital growth, and the property price boom is well and truly over. Invest for steady, regular rental income, and not short term capital growth. You want to achieve rental income that can provide enough to build up over time as another potential deposit for further investment.

2. Range far and wide
Many first time buy to let investors purchase a property near to where they live. Whilst it is important to know about the area that the property you are going to invest in is situated, try not to limit yourself to the immediate locale when looking for that ideal investment opportunity. Try looking at commuter belts, or areas near to large universities, depending on your target tenant.

3. Negotiate hard!
As you are not moving house yourself, and are not part of a ‘chain’, you have the advantage of a good bargaining position when it comes to the seller’s price. The seller needs to sell for whatever reason, and usually there will be a time factor involved for them; not so for you. Haggle hard!

4. Be aware of risk
Make sure you have full knowledge of the potential pitfalls when investing in buy to let property in the current economic climate. Although house prices have significantly re-adjusted already in recent months, they may fall further in the coming months, so be aware of the risk of negative equity. Make sure that there is demand for the type of accommodation you wish to rent out in the area; make sure that the rental income return you need, and the target tenants are present, with this demand.

5. Budget for your own time
Decide how much time you wish to spend maintaining the flat and fulfilling your other obligations of a landlord, and make sure you have a realistic idea of how long it will all take. If you do not have time to meet these demands alongside other responsibilities, make sure you have a good idea of the costs associated with using an agency.

As with all investments, due care and attention is needed; to protect your property make sure you have an awareness of home insurance, and buildings and contents insurance issues by consulting professionals such as Legal and General.