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Advice if you are buying to let

Created on 13/01/2015 @ 19:17
Firstly, a very happy new year to you all. I can hardly believe that we already find ourselves in the middle of January! However I am happy to report that the market so far this year seems extremely positive. 

When the office doors opened again at the beginning of the month, things went bananas! We have had lots of offers coming in and agreed a healthy number of sales for our clients already. A great start! 
The surprise changes to stamp duty at the end of last year were an extremely welcome boost for us all whether buying, selling or both. I hope that there will continue to be increased confidence in the market this year, even with a looming general election, resulting in more transactions and a more fluid Mid Wales property market. 
With a more positive property market ahead of us and continued low interest rates, more people may start to consider investing in bricks and mortar. So, this month I wanted to share some tips with you should you be considering going down the buy to let route:
1. When looking for buy to let property, it is vital that you detach yourself from the property. Remember you are not going to be living in it yourself, it is an investment, it is business. All too often I see people’s emotions over ruling their head when it comes to investment property and this can result in poor buy to let decisions, be this with the style of property, location or even decor. 
2. Dont spend more then you need to! Often people with a budget of say £140,000 will look to buy one property of that value. In reality the rental returns in our area on a property worth £140,000 will not be hugely different to a property worth £70,000 or £80,000 and so your rental yield will be much much better if you buy the cheaper property. Not only this, but your money could instantly go further and you might even be able to afford another property therefore growing your portfolio and spreading your risk.
3. Low maintenance is good. Biggest is not always best and certainly when it comes to buy to let property with gardens. Tenants will not generally want the hassle of having to maintain acres of gardens and so inevitably they become neglected causing more trouble for you as a landlord. Try to strike a balance with your property so that there is enough outside space to compliment the house but not so much that tenants wont be bothered with it.
4. Location is key. There is no point in investing in an area where there is not demand for rental property. Do your homework, you might be surprised how close to home you can find demand for rental property which makes life a lot easier when managing and maintaining the property.
5. Consider doing some work. If you can lend your hand to some simple DIY and upgrading then you could benefit twofold when purchasing a property in need of a bit of TLC. Firstly you may add some value to the property, so when you come to sell it at whatever stage in the future you could see some capital growth. Secondly a nice, newly refurbished property should let well and perhaps even command a slightly higher rent.
6. Be careful what you buy! For example, modern flats and apartments and some new houses can at face value look extremely attractive: low maintenance, all mod cons installed in them, tenants eager to rent, however be careful! Some new housing developments, flats or apartments can be subject to the likes of service charges and ground rent which could eat into your returns. You may also want to consider the tenure of what you are buying. Leasehold property can cause problems when it comes to you reselling as many mortgage lenders will require a certain length of lease before they will lend. This can of course make it difficult for you to sell down the line!
7. Finally make sure you take advice from the professionals, an independent financial advisor, an accountant and of course a reputable agent will all be important and useful to you throughout the process.
For further help and advice on any property issues in Mid Wales please feel free to contact me at any time.
Tom Carter
07855 834 282