MY 5 TOP TIPS TO GUARANTEE BUY TO LET (BTL) SUCCESS
In early to middle March, at the beginning of the Covid 19 lockdown, as well as throughout the height of the Covid pandemic, should you have asked near enough any professional worth their salt in the BTL property market, they would have told you to expect house prices to crash. I felt more positive and hopeful of growth and although at a reduced rate, house prices did indeed continue to rise.
Halifax´s most recent research has added extra proof of this: UK house prices, after four consecutive months of falls, set a new record of a 1.6% July rise. An average property price of £237,834 rose by £3,770 month-on-month to £241,600. Year-on-year it’s a 3.8% spike after the most recent mini-boom. In my opinion we are over any resemblance of property market anxiety and we will begin to see the trend of pre-Corona movement return with a positive spike.
As a current landlord or first-time investor you have been handed a golden opportunity to begin or continue the growth of your property portfolio. This is largely due to the incredibly low interest rates currently available, a continual rise in rental fees and not to forget, this unique pandemic´s slowing of property values compared to the projected values for this point in the year. Craig Upton not shy to put his face out there, has provided some top tips.
HERE ARE MY 5 EXPERT TIPS:
- 1. HAVE A TEAM TO CONSULT FOR ADVICE.
BTL property development requires a support structure; from a top quality mortgage broker, to lawyers, to accountants, to trusted builders. Most of all, a team of unbiased professionals who aren’t trying to sell you anything but just dedicated to giving you the highest profits possible.
Here at ukpropertyfinance.co.uk, we specialise in every aspect of property finance that include all types of mortgages, development finance, commercial finance, equity release, bridging and second charge loans.
Ask Craig Upton for any personally targeted advice.
- 2. CASHFLOW
Buy to let investors generally are looking for rent to cover no less than 125% of all mortgage payments and most demand 25% deposit or more. As a rule, the best buy to let mortgage rates will come with large arrangement fees, so make sure, with these bits of knowledge to hand, that you can, and will, be able to afford the budget. A GOOD OLD PEN, PAPER AND CALCULATOR TO WORK OUT EXACTLY WHAT INCOMINGS AND OUTGOINGS ARE NEEDED. Make sure you include in the calculations that natural changes, such as periods of void in occupancy, are taken into consideration.
- 3. LOCATION OF PROPERTY.
One of the best bits of advice I can give you, as an investor in multiple properties, is to know the area that you are purchasing the property in. This sounds obvious but sometimes the deal or offer for a property seems too good to be true, and research into the area can help you understand this better. From upcoming or depleting commercial activity to future or past transport availability and school performance ratings. Everything can and will influence the amount of rent you will be able to charge future tenants.
- 4. CONTINGENCY SAVINGS.
It’s advisable to factor in unforeseen costs for the future, as I mentioned in the cash-flow section, which could lead to financial difficulty if not planned right. As a guideline, 30-35% of one year´s gross annual revenue must be saved in that rainy day pot for situations such as general maintenance and letting fees.
Many landlords have hit difficulties from this and it cannot be stressed enough, don’t take a gamble but calculate risks if you want to succeed in the BTL game. You can use a Buy to Let calculator for this.
- 5. DON’T LET YOUR HEART RULE YOUR HEAD.
Last of all, and probably for me, the hardest to do as a person who is passionate about property, don’t become emotionally attached to a potential home. You are buying to let, not buying to live in. Your heart can get in the way of the right residence, in the right location for the right price. SO PICK WITH YOUR HEAD NOT YOUR HEART.
