At a time of low interest rates and high demands, the buy-to-let property market is looking increasingly more attractive. With more and more first-time buyers struggling to get on the property ladder, buy-to-lets are the ideal solution for everyone involved.
If you’re planning on investing, now is probably the best time. Low property prices and increased demand, coupled with high rents and improved mortgage deals, make this the ideal time to begin your buy-to-let journey.
Here, we will share with you 7 tips for getting the best return on buy-to-let properties, and how you can make them work for you:
1. Research the market
To get the best return on your buy-to-let, you need to monitor the property market before jumping in.
As any seasoned investor will tell you, it is important you buy at the right time. The housing market is in constant fluctuation, but it also works in trends. At present, property prices are quite low meaning it is the ideal time to buy. If you’re buying-to-let or sell in the future, there is no time like the present.
When prices do rise again, you will be able to get the best return on the price you paid.
2. Choose areas wisely
Choosing your areas wisely, doesn’t have to mean the most expensive or the cheapest. If you want the best ROI, you need to select a property in an area where people want to live. You need to choose an area with good transport links, work opportunities, schools, and things to do.
But don’t limit yourself to your local area.
You may get the best return by looking further afield. Cast your net wider and look at towns that offer all these things for your tenants. By offering a great property in a sought after area, you certainly won’t struggle finding renters.
3. Identify your target tenants
Part of choosing the right area, is knowing who your ‘ideal’ lodger is.
If the property is in a university town, you may well be looking for a group of students to rent the house. In this case, they will be looking for lots of bedrooms, close transport links, nightlife, and a short trip to their lecture theatre. Likewise, young professionals, families, and retirees will all be looking for different things.
Identify who you want to target, and make sure both the area and the house can offer them everything they need.
4. Know the numbers
Before you commit to buying a property, you need to work out the cost of any property versus the amount of rent you are likely to get every month or year. Can you afford for the house to sit empty for a few months or will it need to be full all the time?
Are you able to account for fluctuations in the market, and cater to any drops in rental rates? You can typically expect rental payments to cover 125% of the mortgage repayments, after a 15-25% deposit. Work out everything you will need to spend, everything you hope to bring in, and if you have any cash over for any emergencies.
5. Shop around for deals
As well as bartering the best deals on the price of the property, there are a number of other outgoings you can cut the cost of.
To get the best return on your buy-to-let, check out a whole host of banks and building societies to try and get the best deal on your mortgage. You should also compare prices for landlords insurance, and all the other extras that you need.
By getting the best deal early on, you can get the best return on your buy-to-let.
6. Consider how involved to get
Buying a property is only half the battle. You need to decide how hands on you want to be in the rental process. Will you rent the house out yourself, or get an agent to do so?
While an agent is the ‘easy’ route, they will charge a fee. However, they will handle all problems and can utilise their network of connections if anything goes wrong. By doing it yourself, you can keep all the profits. You will need to dedicate a lot of time to managing viewings and keeping an eye on the house.
7. Be realistic
While there is plenty of scope for success, you certainly need to be realistic. If you want the best return on your buy-to-let, you need to put in a lot of hard work and effort. There are a whole host of factors that will impact on your success, so keeping an eye on proceedings will certainly help you out.
If you’re looking for a great way to make money, now is the best time to get involved in the housing market. By following these steps and with a lot of dedication, you can get a maximum return on your investment.
This article was supplied on behalf of Walton Homes, developer of new homes in Staffordshire. Visit their website at http://waltonhomes.co.uk to view their current new homes for sale.
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