Buying an investment property is a great way to invest, this kind of property should be about adding to your wealth and financial future. If you effectively manage your investment you should reach your financial objective.

Property investing has paid off for lots of people, with capital gains and in terms of income, you need to go into it with your eyes wide open – investing in buy to let involves committing thousands of pounds to a property and probably taking out a mortgage.

If you know of anyone who has already invested, speak to them about their experience. The more information and research you have, the higher chance you’ll have of your investment working.

Chose a place where people want to live, this is not always the most expensive or cheapest. Most people invest close to where they live. A plus is you will know the market better and should be able to spot an appealing property that will do well, you’ll also be able to make sure the property is being looked after.

Try not to picture if you would live in your investment property, imagine if your target audience would. For instance, students need easy and clean not luxury property. Young professionals will look for a stylish and modern rental.

Prior to buying a home, think about the cost of houses you’ll be looking at and the likely rent you’ll get.

You want rent to cover 125 per cent of the mortgage repayments on your buy to let property, most demand 25 per cent deposits for rates above mortgage deals.

Once the mortgage payment and rent rates are sorted, you’ll know if your investment will work – remember to add in maintenance costs. 

Make sure you shop around for the best buy to let mortgage. Also, speak to a good independent broker, they will talk you through the available deals and help you to choose which one is right for you. Do you own research as well, so you have knowledge of what mortgage you should be offered.

You’ll have the same advantage to negotiate a discount as any first-time buyer, especially if you are not part of a chain. Not relying on selling one property to buy another is a major asset when negotiating a discount.  It will also help if you know your market, if homes are taking longer to sell or there is a shortage of properties, you might be able to get a better discount. Try to find out why they are selling and how long they have owned the property.

If it’s a landlord who has had the property for quite some time, they might be willing to take a lower offer for a quick sale.

You should think about the negative aspects of investment as well as the positives. House prices can change quickly, if property prices do drop will you hold on to your investment? Even if your investment property is appealing to renters, a property can sit empty – factor this in.

Allow a buffer of two months a year for the property to have no tenants. 

Lastly, buying the investment is the first step. Think about if you will rent it yourself or instruct an Estate Agent.

An agent will charge a fee, but you won’t need to deal with any issues that could arise. They should also have a good database of tradesmen, if needed. If you plan to rent it yourself, be prepared to give up time for viewings, repairs etc.

The biggest issue with buy to let is void periods, you want good tenants who want to stay long term, even if they do move on, they could recommend your property.

Maintain your property. Make sure it’s a clean and nice place to live and build good relationships with your tenants.

Alone or through an agent, it pays to look after your tenants!

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