A guide to buying a buy-to-let property
Are you thinking about investing in a buy-to-let? What questions do you have – is this the right move for you, and do you know what is involved in the process? Don’t worry – we’ve got you covered in todays’ article!
The 'Who' and the 'Why'
When considering a move in the property market, whether it’s an investment or relocating your current home, it’s essential to understand the motivations behind your decision.
With over 40 years in the property space, we’ve seen a lot of changes and cycles, especially in property purchasing.
A lot has changed in the private rental sector. Download our free landlord guide today.
Buyers typically fall into two main categories:
- Professional landlords adding to their portfolios. They focus on potential yield, treating it strictly as a business move.
- Retirement planners aiming for capital growth. They might buy a bungalow in a village, rent it out to cover costs, and plan to either move in upon retirement in a few years or sell it to boost their pension.
When it comes to residential property, we appreciate that different buyers have different reasons for investing, but the main drivers and therefore strategies people focus on are capital growth and rental income.
Mortgage deals
It’s a positive picture overall for investors looking to take the leap or continue to build on property portfolios as we continue to see an improvement in mortgage product choice year on year.
As you may have seen in our recent article ‘State of Your Local Market: May 2024’ Adam Dumbrill, from Apollo Mortgages recently shared ““May delivered good news for the mortgage world: rates are beginning to fall and we now have inflation down to 2.3%. We can but hope this will lead to the Bank of England lowering the base rate. It might be a month too soon but we can be hopeful, and believe the outlook is definitely brighter than of late”.
Additionally, Moneyfacts mortgage expert Rachel Springall says: “The stabilisation of buy-to-let product availability is a positive turn of events for landlords after recent months of contracting choice”.
If you’re considering investing in buy-to-let properties, we recommend seeking professional advice from a reputable source to ensure it’s the right move for you. While the potential returns can be enticing, it’s important to look at the bigger picture. The reduction in mortgage tax relief, costs associated with EPC requirements, and other compliance factors can significantly impact profit margins on some properties. Learn more about the latest Buy-to-let market analysis.
Speak to our mortgage advisors – Adam and Matt – who will be able to help you and provide up to date information to guide you through the process best suited to your circumstances. Get in touch with the team today here.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Why should you use a professional rental agent?
When considering investing in a buy-to-let property, partnering with Jacobs Steel can offer invaluable benefits and peace of mind, including:
Protection and Support:
Consider your rental agent as a superhero’s shield – they fight to protect your interests and investment while expertly guiding you through each tenancy and facing any adversity together. With Jacobs Steel by your side, you have a trusted ally who ensures your property is well-maintained and your rights as a landlord are upheld
Legal Compliance:
Navigating the ever-changing legal landscape of rental properties can be daunting. Our team stays up-to-date with the latest regulations, ensuring your property remains compliant with all necessary laws and sharing this knowledge with you. From tenancy agreements to safety standards, we’ve got you covered.
Tenant Sourcing and Vetting:
Finding reliable tenants is one of the main components for a successful rental investment. Jacobs Steel takes the hassle out of tenant sourcing and vetting. We use our extensive network and rigorous screening process to find reputable individuals who will treat your property with the care and respect it deserves.
Financial Transparency:
With Jacobs Steel, we take the guesswork out of the picture. You’ll receive a clear breakdown of the income generated by your property throughout the year. We provide transparent financial reporting, giving you peace of mind and confidence in your investment.
Choose Jacobs Steel as your rental agent, and let us handle the complexities while you reap the rewards of hassle-free property management.
To learn more about the 3 levels of property management service we offer for landlords, click here.
What sort of property should you buy?
The honest answer is there is no ‘one size fits all’ answer. The type of property you ‘should’ buy very much depends on whatever your long term goal is, and this can vary a lot between people.
Over the last 20-25 years, there has been a big culture change of who’s looking to rent property. Previously, renting was more a case of people doing so because they simply couldn’t afford to buy a property, whereas now it’s more of a lifestyle choice. We see tenants choose to rent because it offers greater flexibility and compliments their lifestyle better. Renting offers a long term solution to allow people to live where they want to, without the level of commitment that comes with purchasing a property.
The specific types of property that people are looking for, and therefore what we believe are good options for investors to buy with a view to let them can range from 1-2 bedroom apartments right the way up to 6 bedroom detached family homes with large outside space. As you can see there’s a lot of scope to pick and choose. This variety offers investors ample opportunities to choose based on budget and preferences.Even with a smaller budget, there’s potential for a good return on investment due to high demand. Another benefit to those who are looking to invest now is that there is now demand to make greater returns on larger rental properties too which we hadn’t previously seen on this scale.
Key considerations
Before you start investing, there are some important things to think about that affect how much money you’ll make.
First, make sure your decision makes financial sense. Can you afford it now, and will it give you a good return?
At Jacobs Steel, we know how important it is to make smart financial choices. Our trusted mortgage advisors can help find the right solution for you. Get in touch with us today to get started.
Remember to think about all the costs, like maintenance and fees. Often overlooked are expenses related to compliance with landlord regulations, such as Energy Performance Certificates (EPCs), and ongoing property upkeep, even during tenancy periods. Our team can help you understand all these costs so you can make the most of your investment.
By thinking about these things and working with Jacobs Steel, you can feel confident in your investment decisions and reach your goals.
