Benefits of buying-to-let
Do you think buying a buy to let investment is something you should consider? Talk to our experts about buy-to-let investments to find out the best places to invest and what potential yields your purchase might bring.
The advantages of buying-to-let
It’s easy to see that buy-to-let properties are a good investment. There are over five millions of private renters within the UK. These are just a few of the many benefits of buying a buy-to-let home.
Long-term property investment is a good idea: Despite uncertainty in the housing market, it’s a smart bet to invest in long-term properties. Bricks and mortar are more profitable than saving money in a bank. The average property value is still higher than it was 10 years ago. This makes long-term investment in property safer than flipping properties.
There is still plenty of growth. We are seeing an increase of growth in previously underdeveloped regions, such as villages and rural towns, as well areas that are being gentrified. There are many investment opportunities in the country, even if you don’t live near large commuter belt areas or have large CPDs.
Earn a steady income: The steady stream of income you can generate will not only pay your mortgage but also give you an income stream.
There is still a high demand for private rentals. Renting is still a popular option for many people who cannot afford to purchase. The rental market is a very competitive place for tenants. Properties are usually let in 14 days in capital, and in 24 days in North East.
What should you look for in a property to buy-to-let?
There are many things to consider when investing in buy-to -let properties.
How much can you afford to invest? Once you have a budget in place, you can calculate the rental income potential to cover your expenses.
Who are your tenants? This will affect the type of property you choose to invest in. Are you looking to rent to students, families, or young professionals?
Your location –The type of tenants you attract will depend on where you invest. HMOs, for example, are more suited to universities and CPDs than families. Families will prefer properties that are closer to schools.
How to calculate your rental income – A buy-to-let investment is a financial one. It’s important to take the time and understand the local market before you can determine the potential income that your property might generate. Understanding the local market will help you determine if your potential rental income can cover your landlord’s costs.
What are the returns on a property bought-to-let?
You will need to decide what type of return you want when you become a landlord. You will need to determine whether you are looking for capital growth or rental yield for each property. Each has its own advantages, depending on your needs.
Capital growth – The increase in property value over the medium-to-long term. This means that the property can be sold in the future to make additional gains, or to cash out to invest in other properties.
Rent yield – The income earned from the property. Yield is calculated as a percentage of the property’s current value. A good rental yield is between 12% to 15% for HMOs, but 5% is acceptable.
What are your responsibilities as a landlord of buy-to-let properties?
You are legally responsible for making sure your property is safe and habitable. You must:
Meet safety standards
Each buy-to-let property should have a fire alarm on each floor. Carbon monoxide detectors should be installed in rooms that contain a wood-burning stove or coal fire. All gas appliances must have a gas certificate. Safety standards must be met and furniture should display the appropriate safety labels.
To ensure compliance, all electrical equipment must be tested for PAT. Water supply must also be functioning properly in order to prevent Legionella bacteria from growing.
Get an EPC
EPC certificates must be obtained for all properties that are bought-to-let. The rating must not exceed E. EPCs can last for ten year and you don’t need to renew them for each tenancy.
Rent
Landlords are legally required to make sure that their tenants are allowed to live in the UK. Renting a property to illegal immigrants can result in a maximum fine of £5,000 and up to five years imprisonment.
To learn more about the responsibilities and roles of becoming a landlord, go to our landlord page . Learn how Lovett&Co. Estate Agents can assist you.
How mortgages are bought-to-let
A buy-to-let mortgage is not based on the anticipated rental income of the property. Lenders will typically require that the rental income be between 25 and 45% greater than your mortgage repayments.
Lenders will also require a deposit of approximately 25%, rather than the lower deposits required for a residential mortgage. Lenders will often charge a product fee and interest rates for buy to let mortgages can be higher.
Why should you use an agent to buy-to-let?
You can have one property to buy-to let or manage a large portfolio. An agent will help you save time so that you can invest in other areas. Furthermore, agents who specialize in buy-to-let can provide invaluable insight into the national and local housing markets, which will help you maximize your potential yield.
Lovett&Co. Estate Agents is a property-focused firm. We live and breathe it, so let us help you manage your investments. The following are the features of our buy-to-let property consulting process:
Maximising rental income
We’ll review your rental income to help you get the highest possible yield. We can also help you reduce void periods between tenancies.
Portfolio expansion and planning
We have a network of branches across the UK and dedicated departments for Sales, Lettings, and Management. This allows us to pinpoint hotspots and best places for buy-to–let investment. We can also help you plan and execute a reinvestment strategy.
Review of a buy-to-let mortgage
We have strong connections with professional Mortgage Advisers and can help you evaluate your existing portfolio. We can assist you in finding the best buy-to-let mortgage products available and offer you interest rates if you need to arrange financing. Our Buy-to-Let agents and a Mortgage Advisor will assist you in every step of the process, including choosing a lender, setting up an agreement in principle, and filling out a complete application.
Manage and let your properties
Our Lettings and Management teams can collaborate with our Buy to Let team to make the process of renting your property easy, manageable, and stress-free. Our branches strive to achieve the best results for our clients, and often get rents that are higher than the regional average.
Why Lovett&Co. Estate Agents should help you with your property buy-to-let
Lovett&Co is a UK-based firm with offices in Lichfield, Burntwood, Cannock, Rugeley, and Walsall. We have the expertise you need to help you not only in your local buy-to -let market, but also in the private rental market. This invaluable knowledge allows us to partner with landlords like yourself to maximize your investment.
We know that being a landlord of buy-to-let properties can be time-consuming due to constantly changing rules and regulations. That is why we offer a range of landlord services to meet your needs.
Find your nearest branch to learn more.
