Becoming a buy-to-let landlord, or expanding your existing property portfolio, is a big commitment, and as with any investment, there are lots of important things to consider.
The costs involved with a buy-to-let property are substantial and the figures need to be accurate to ensure your investment will be worthwhile.
The first thing you should know is stamp duty costs rose in 2016, meaning landlords pay an extra 3% on top of the usual rates you pay when buying a residential property.
Secondly, buy-to-let properties require a larger deposit, with 20-40% being the average deposit amount.
As usual, the larger the deposit you can put down, the wider the choice of mortgage you will have.
As a landlord, you’ll have to consider letting agent costs if you do not want to find a tenant yourself.
You’ll have to consider these costs into your calculations, so make sure to find out how much you can expect to pay, and what you get for that cost, up front.
You’ll also have to consider maintenance costs. Whilst these can’t be planned for, it’s always a good idea to prepare for them as you never know when a leak can spring, or the lights go.
The property and surroundings
When looking at purchasing a buy-to-let property, the type of tenants you are looking to let to will often influence the type of property you purchase.
A professional couple, for example, will want a property close to the city centre and transport links, whilst a young family will want to rent a two or three bedroom property in the suburbs near to a park and a good school.
It’s also a good idea to try and keep your property portfolio local to your own house, as you can be quickly on hand if anything does go wrong.
For further advice on what to consider as a landlord, talk to one of our expert advisers today.