Buy To Let Being A Landlord

Date Published:

06/06/2008

Whatever approach you choose, you are still required by law to ensure the safety and maintenance of a rented property and its contents to prevent injury or damage is caused to your tenants, neighbours or any other member of the public.

Such concerns are why the new homes market has become so popular with investors. New homes developments tend to be built as close to amenities and major transport facilities as they can to accommodate 21st century cash rich, time poor lifestyles. New homes also benefit from brand new, sometimes state-of-the-art fixtures and fittings, and ten year structural guarantees. Developments in the centre of towns and cities can be extremely popular with renters looking to be at the centre of things without necessarily having the funds for a deposit to purchase.

If after a couple of years as a rental property the market has changed or moved elsewhere, selling a relatively new property in a good area has its obvious benefits.

If you are thinking of renting out a property you need to consider a number of points:

Is The Property In A Popular Area?

In many ways you are looking for the same features in an area that you would look for in a property that you intended to live in yourself - good transport links, good vibe, signs of being upwardly mobile etc.

Is The Rental In That Area Normally Bouyant, Non Existent Or Saturated?

The only way to find this out is to visit a cross section of estate agents in that area. Find out who if anybody wants to live in that area. There's no sense for instance in buying a state-of-the-art yuppie pad to let in an area only really popular with students and backpackers on limited funds.

Is The Property Suitable?

Most buy to let loans will be calculated on achievable rental income taking into account things like location , rents achieved by similar properties in an area etc. For that reason almost any home will be considered for a loan - with the exception of corrugated metal houses etc. Traditionally lenders don't discriminate between older and newer properties. A company's valuer will check whether the property is worth its selling price and whether it can achieve the proposed rental income. If it satisfies those requirements, most lenders will be happy to lend.

Some lenders won't, however, consider applications for homes destined to be broken up into multiple lets, and most will impose restrictions on any property that requires extensive refurbishment before it can be let out. Often the company will retain a portion of the loan until the necessary renovation work is completed.

This should be remembered if you intend to buy a property that isn't immediately suitable for letting because it may be some time before there are tenants to meet the mortgage repayments.