Buy to Let - is it for you?
By: Sean Horton
Buy to let is big business. You may find yourself receiving mailings about big seminars being held in your area. They talk about the huge profits people are making and invite you to get in on the act. The may promise to show you how to get a buy to let mortgage without a deposit, or how to purchase property without using any of your own money!
They make it all seem very exciting. You may be tempted – are you right to be?
Buy-to-let can certainly bring big benefits:
• It can provide you with a regular second income.
• The property can appreciate, providing you with a substantial capital gain.
• More and more lenders are offering buy-to-let mortgages.
• With an increasing number of people unable to get on the property ladder, there is plenty of demand for rental property.
But is it really as simple as the ads make out? No it isn’t. Buy to let isn’t for everyone and you need to decide whether it is for you. It is a huge step to take and you must weigh up all the implications of becoming a landlord. Is this something you really want to do? And remember, if you don’t have a successful tenancy, you don’t make a profit.
• Check out the area where the property is located before buying. Is it an area people might want to rent a home – for instance, is it near a university or offices?
• Once you have got your buy-to-let mortgage and bought the property, it is tempting to grab the first potential tenant that comes along. But tenants come in all shapes and sizes – some are decent people, some aren’t. The wrong sort of tenant could bring you a lot of grief. Don’t accept anyone without thorough checks and references, plus an adequate deposit and advance rent.
• You are responsible for repairs, problems and complaints. The phone can ring at the most inconvenient moment and you have no choice – you have to sort it out there and then.
• If the tenant leaves, you still have your buy to let mortgage to pay. So your property is LOSING money until you find another tenant – you have to go through all that again.
Many people thoroughly enjoy being landlords and find it fun as well as lucrative. Just make sure before you commit yourself to a buy-to-let mortgage that it is something you really want to do.