Buy to let how to guide

By The Beresfords Marketing Team - 15 April 2011

Recent data from the Association of Residential Lettings Agents shows that 71% of landlords believe renting is becoming increasingly popular, with demand increasingly outstripping supply. What’s more the latest English Housing Survey shows that the Private Rental Sector now accounts for more than 15% of housing in England.

For anyone considering entering the buy-to-let market for the first time Beresfords recommend the following:

To find the right buy to let investment there is only one place to start – with a local letting agent. They will know the type of property available to match demand and what is in short supply.

Choosing a property for buy to let is all about the location, it is absolutely essential that you choose the right property in the right place. The essential start point is what type of tenant do you want to attract? If you are hoping to appeal to city workers then a flat near a train or tube station is ideal. A family will need space and to be local to good schools.

The key is to keep the client in mind and not buy a property because it is the sort of place you would like to live yourself. That’s a classic mistake that too many people often make. A property may appear simply charming to you, but if it’s not easily rentable, then your buy to let undertaking can be doomed from the start.

As with any investment decision it is vital that you do the maths before you take any action. Many house hunters end up going over budget when buying the property because they ‘fall in love’ with their dream home. Buying an investment property is a business decision and you should always approach it as such.

It is essential that you know what your means are, and work out the affordability of the whole project, not just the mortgage. A contingency fund is vitally important for when the property is not being rented and mortgage repayments must be met.

For the best mortgage deal your best option is to use an independent financial adviser who will understand this sector and have kept up to date with the changes in the market. Lending grew by around 7% in the buy to let sector during 2010, underlining the continued strength of the market.

Buying a property is only the first step. Do you wish to market and manage the property yourself or do you intend to entail the services of a professional letting agent? A letting agent can be on call to resolve any problems such as maintenance issues but don’t be tempted by the agent with the cheapest fees as they are unlikely to offer the best service.

When enlisting the help of letting agents be sure to opt for one who is a member of the Association of Residential Lettings Agents (ARLA) as they are governed by a code of practice that ensures professional standards