Starting out in property investment can be a daunting prospect. There are plenty of things to remember when looking for a suitable property, and just as many options to juggle when considering the best buy to let mortgage product for you. An independent mortgage advisor can be a great help, and you can do a lot of your own research by using online mortgage comparison services, but here is a short guide to start with that will help you with the other issues to consider.

Know where you are

Statistics show that the most successful, least stressed buy to let landlords are those who live near to the property they are renting out to tenants. This is perhaps because they are on hand to help their tenants with maintenance issues, and also perhaps because they know about the housing market in which they are buying, as it is the one they live in too. Whilst your own personal experience of an area can be invaluable, in order to help you get an even better insight into the best property to purchase buy to let, it is perhaps worthwhile to enlist the help of a letting agent who knows the area well. They will know what kind of property is in demand in your particular corner of the market, and can guide you away from common mistakes.

Avoid “fixer-uppers”

Even if you do see yourself as a practical sort who is good at DIY, getting a buy to let mortgage on a house or flat that is cheaper but will need more repairs is normally not a great idea. More maintenance means that you will either have to charge more rent to cover the costs of repairs as well as your mortgage payments, or end up paying for repairs out of your own pocket, making the buy to let deal less cost effective in the long run. Higher maintenance properties are also unattractive to potential tenants, who will not appreciate having to contact you regularly to report leaking boilers or crumbling plaster. An unattractive property could lead to void periods, which in themselves are problematic and potentially expensive.

Protect against void periods

Void periods are the buy to let landlord’s biggest concern. These are periods of time where there are no tenants in your buy to let property, and some void periods are unavoidable. This means that there is no revenue, for that period, to cover your buy to let mortgage payments, meaning that you will have to pay them yourself, possibly on top of any mortgage payments or rent on your own home too. This can be potentially ruinous if they are allowed to continue for long periods of time. The trick is to plan so that they are as short and occasional as possible. It is always a good idea, as well, to invest in insurance to cover you during void periods; your buy to let mortgage lender should be able to provide you with information on such insurance products.

This entry was posted on Friday, October 24th, 2008 at 3:30 pm and is filed under Property Investment. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.