5 Things To Do Before Buying Your 1st Buy to Let Property


5 Things To Do Before Buying Your 1st Buy to Let Property

In property as with so many other things preparation is the key to success. If you are considering investing in buy to let then following these 5 steps before buying a property will minimise your risk and make you a more successful Landlord.


There is more than one way to make money from property so the first thing you need to think of is the strategy that is right for you. Are you looking for an investment that will give you a good monthly return or are you happy with something where the rent will only cover the mortgage but you will get a nice uplift in value over a 10 year period? Of course in an ideal world you would want both but the two don’t always go together as for example an ex-council property can offer a high yield but is less likely to have a significant increase in value. This is why before you can start to think about what type of property might be suitable you first need to consider what it is you are looking to achieve and over what timescale.


You next need to speak to a good mortgage broker to establish what you are going to be able to borrow and the amount of money you will need to put down as a deposit. You want to speak to a broker who has a lot of experience in buy to let mortgages to make sure that with so many different options available you are getting expert advice.

Letting Agents

Now you’ve got an idea of what you are looking to achieve and the amount you are able to invest it’s time to go and speak to some letting agents. You need to pick their brains and find out the areas and types of properties that are in most demand and how long it will take on average for properties to let. At this stage you will also get an idea of the varying levels of expertise and service that they offer so you can start forming an opinion on who you would be most inclined to use once you have actually bought a rental property.

Target Market

Following the advice you received from the letting agents you should have a good idea of the type of property and area that you would like to buy in so it’s time to consider your target market. For example if you have decided to look for a two bedroom house in Oakwood then you will know that professional couples are your most likely source of tenant. An easy mistake made by prospective Landlords is to forget they are looking for a rental property and to judge properties from the perspective as if they were going to move in themselves. Now you know your target market you need to view properties with them in mind so in this example you need to consider how a professional couple would feel about a particular property.

Stress Test

With all the knowledge you have acquired now is the time to stress test your numbers before you are finally ready to go out and purchase a property. Your research may have told you that you will need to spend £130,000 on a property which will give you a rent of £525 pcm and that your will need to put down a 20% deposit and will be paying an interest rate of 4%. This would give you an interest only mortgage payment of approximately £350 which looks to give you a comfortable margin against a rent of £525. However once you factor in a one month void period a year, average maintenance costs of £50 pcm, agency fees and insurance costs of £70 pcm then it brings this down to virtually break-even point. You are always better off over estimating rather than under-estimating your costs to make sure that there aren’t any nasty surprises. Your calculations also need to consider tax liabilities and the impact of interest rate rises so that you can be sure that your investment will not become a liability that will start costing you money.


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