With interest on savings being at an all time low more people than ever before are thinking about investing in a buy to let. Even with the recent tax changes to the buy to let market, buying a rental property could offer you a good return but before taking the plunge there are few factors you will need to take into consideration:
Research is key to any type of investment and when buying a buy to let it’s important you make sure that you are purchasing in an area with a high rental demand. Think about your potential renters - if you are buying a large property near a University you might want to consider buying an HMO, House with Multiple Occupancy, as this might give you a higher rental return on your investment. If you are looking at investing in a large house and would like to rent it out to families make sure that you buy a home in an area which is close to good schools and facilities such as shops and sports centers. If you are buying a home with professional couples in mind you will need to make sure that it is close to good transport links. Local estate agents such as Goodfellows will be able to give you advice on investment properties, as they have a good understanding of the local market.
Do your sums:
Make sure that your property will give you a good monthly return, work out the yield you will make on a property, this is the purchase price compared to the monthly return. If you are taking out a mortgage to finance the purchase of your buy to let then most investors will normally look to earning 125% of their mortgage to cover any unexpected costs such as maintenance and dormant periods.
Make sure you follow the law:
In recent years there has been an increase in the laws concerning renting out property, so it’s important to understand all of these such as making sure that your gas appliances are serviced every year by a registered gas installer, you will need to follow the ‘Right to Rent’ procedure, you will have to install and monitor smoke and carbon monoxide detectors, deposit security deposits in the rental deposit scheme. Not flouting these laws can be daunting for a property investor so it’s best to enlist the help of a registered ARLA estate agent such as Goodfellows so that they can guide you through the process.
You will need to make sure that you file a tax return and as renting out property is classed as running a business you will also need to pay class 2 National Insurance contributions on your payments. If you have a mortgage on the property you want to rent out, you must get permission from your mortgage lender.
If you are thinking about purchasing an investment property, then Goodfellows Carshalton Beeches has this spacious two bedroom flat for sale for offers in excess of £285,000, which could offer an estimated return of £1,250 pcm - a yield of 5.26%.
The flat is located close to highly regarded schools and within walking distance of Carshalton Beeches station, shops and restaurants. The accommodation includes a bright double aspect living room, fitted kitchen/breakfast room, contemporary bathroom and also benefits from double glazing throughout, residents entry phone system and lift and ample storage.
- Two Double Bedrooms
- Second Floor
- Residents Lift
- Ample Storage
- Close To Barrow Hedges Primary School
- Walking Distance From Station
If you would like to find out more about this property, or arrange a viewing please call 020 8773 2424 or follow this link.
If you are looking at investing in a property for the first time or would like to talk to us about expanding your portfolio then why not pop into your local branch of Goodfellows for a chat and a coffee or call our team on 020 8102 0554.