When you want to invest in property - or build your portfolio
Many people aspire to become a private landlord because they think it is an open door to a lucrative new income stream. However, there are risks, extra costs and complications that must be considered - and there is no guarantee that house prices will rise while you rent out the property concerned. There are three major differences between buy-to-let mortgages and conventional mortgage products:
a)The decision on whether or not to grant you a mortgage is based on the rent your property will accrue, as well as your income
b)Buy-to-let mortgages tend to have slightly higher interest rates
c)You will need a larger deposit, usually between 20 and 25 per cent of the property’s value
If you are considering buying a property to let it out, you should decide whether you are aiming to make money through income or capital growth. Do you want to make a profit each month, or from the property’s value increasing during your ownership? The answer to that question will determine where you buy and what sort of property you invest in. Get help from local letting agents who can tell you what type of properties are available in their area, and how high the demand for rental property is likely to be. You should also take into account that there are a host of extra costs associated with a buy-to-let property, in addition to the monthly mortgage payments. Indeed, you should be aiming for a gross rent of at least 135 per cent of those mortgage payments for your investment to be viable.
What our customers say about us
“Remortgaged residential and buy-to-let properties with Maria, very professional service and kept informed of each step along the way. Would highly recommend her to find you the best product on the market to suit your personal needs.”
- Steve