A buy-to-let investment is a property you have purchased with the intention of letting it out to a tenant, making you a landlord. Starting out the journey of becoming a property investor is definitely exciting but also nerve-racking. Real estate has produced many of the world’s wealthiest people, so there are plenty of reasons why it is a sound investment path. Whether it’s your first time investing or you already have a portfolio, we can tell you all you need to know with our property investment advice. Many see property as an alternative that can provide their desired returns whilst being something they can understand. There are various reasons why people choose to invest in property, which includes: Diversification – one of the key components of a well structured investing portfolio. Whilst there are plus points, there are some downsides you have to consider too. Here are some examples: Problem tenants can cause emotional and financial strain. If you’re looking at how to begin property investment, you’ll need to know how much you’ll be spending. So, when planning to purchase your first buy-to-let investment property, there are three main considerations you’ll need to keep in mind: The cheapest mortgage interest rates on the market are reserved for those with at least a 40% deposit. Experience counts as well since beginner property investors and those who have yet to purchase their own home will be subject to higher rates. To gauge if the property you want to buy is a viable investment, ask your local letting agent for their opinion on what rent you can charge. If the price is too high, your property might end up remaining empty. It’s smart to use cash reserves to pay off any costly personal debts first, or the amount you’re paying in interest, as it will reduce the value of your investment returns. Being in debt may even impact your credit score, which could lead to higher mortgage interest rates or your mortgage application being rejected. As we’ve already mentioned above in our property investment advice, buying a buy-to-let property is a long term investment, not a way to make quick money. Over time, the property should increase in value, but if you attempt to sell too early, you might catch property prices declining and miss out. It’s important to focus on generating a healthy monthly rental income instead. There will always be a reason why a property is priced cheap. It might leave you out of pocket – there could be structural issues with the building, cracks that need repairing or pipes that need replacing. All in all, even if you think you have paid a good amount for your property, your investment return will diminish if you have to spend thousands of pounds getting it ready to rent out. You might be earning a good rental income, but if your costs are too high, your profit margin will inevitably shrink. To work out your margin, consider the following monthly costs: If you’re a beginner looking for property investment advice, keep it simple by purchasing a property with mass-market appeal and requiring minimal work to get it ready for your tenants. With an unrivalled experience in the Leicester lettings sector, you can be assured of the best expertise to help you achieve your property investment goals. Contact us today for a FREE rental valuation on 0116 243 7938. Property Investment Advice
Why invest in property?
What are the cons?
How much will you need to invest in property?
Differences between a buy-to-let and homeowner mortgage
Property investment advice before you get started
Avoid high-interest rates
Get a letting agent’s opinion
Pay off any personal debt
Have a long term vision
Avoid properties that need lots of work
Calculate margins
Don’t be overconfident
Experienced letting agents in Leicester