Investing in property is a good idea as it gives high returns. But there are some major Do’s and don’ts while investing in buy-to-let properties.
- Research the market very well
First of all, are you sure you want this? If the answer is an honest yes, then go forward with this idea. If you are new to this particular field, then you should know all the risks involved. Like any other business, it has its own flip side too. Investing in buy-to-let means putting all the capital in property and there is a chance of its falling in value. The major flipside is you can’t buy an unloved investment and set about renovating it and adding value by yourself. It is equivalent to taking out a mortgage so when the price rises, you will make good profit but when they fall down, the deposit gets hit. So educate yourself in all the pros and cons before taking the plunge.
- Go for a promising area
Here promising doesn’t translate into posh and high-end apartments. It means a place where people would like to live and raise families. People look for many reasons like good schools which are nearby, good security system, and good transport system, etc. These may sound simplistic but when you will search for properties, you will realize that the scene is different.
- Do the math
Yes, take a pen and a paper and do the math. Write down the cost of houses and the rent you want. Most of the house owners want enough rent which covers 125% of the mortgage repayments. Many of them demand 25% deposits or even larger. Once you have the mortgage rate and the would-be rent sorted out, you must be clinical in deciding whether your investments work out in your favor. And yes, don’t forget a factor called ‘maintenance cost’. Consider this question, “What will happen if the property sits empty for a month or two?” If you can’t find a good answer to this question, then you certainly are welcoming trouble your way.
- Scour the markets for the best mortgage
Don’t walk in to a bank or a building society and ask for a mortgage. Doing so, you will end up losing a good amount of money. Check online for the best mortgage rates and snoop around. Ask your pals who have bought houses for help. They will surely help you to find the best mortgage rate for your buy-to-let apartment.
These are just the starters; check out internet for the best deals because buying a property is no child’s play. And like mentioned before, please ask the people who are in this field about the profits and losses and understand the nuances. You can also refer to this website http://www.conveyancing24-7.com/conveyancing-quotes-manchester/ for more details. Do your homework well and think thoroughly before you take this huge leap and keep faith in yourself to face any kind of situation. Welcome discipline in your approach and you are ready for that big decision.