If you can afford the initial expenditure for a buy-to-let property, or at least the deposit, there could be a real opportunity to increase your investment. Of course, you might not always be able to guarantee a source of income, but by being prepared and understanding the project you are about to embark on, the savviest investors could end up with a substantial return.
Do your research
Considering whether a housing investment is the best way to make a profit is often the first thing that landlords consider. Making money isn’t always guaranteed (depending on how much you have to spend), and that money could also make a good profit in savings.
House prices also aren’t guaranteed, with the potential to rise or fall sharply in the near future. This means that choosing your geographical area wisely could be of huge importance, but remember, the best area might not necessarily be the most expensive. The best area could be the one where most people simply want to live.
These areas are often near good transport links, have a wide selection of well-graded schools nearby, and are areas in which investment has seen a significant amount of growth.
Shop around for a mortgage
There are some excellent buy-to-let mortgages available if you wanted to shop around. However, landlords are required to have saved a larger deposit than if they were to take out a residential mortgage: perhaps even up to 25%.
Don’t accept face value
When buying a house to rent, there may be some room to manoeuvre with the price. Just like first-time buyers, purchasing a house offers the advantage of there being no chain involved.
Once you arrange the price, the ball starts rolling and the seller can move on to securing their new property. This means that you could haggle the price and secure more of a discount than if you needed to sell your own property, too. Remember, at this point, any money saved on the deposit could prove to be money earned in the long run.
Consider your potential tenants
Many landlords make the decision to prohibit their tenants from decorating, including putting things on the walls. However, you could consider opening up your buy-to-let property to a family and letting them use the space as a blank canvas. By doing this, you could charge slightly more in rent and, at the same time, help the family become happier to stay, thus increasing your long-term earnings.
Done correctly, it’s possible for a buy-to-let property to become a sound investment as part of long-term property goals, and an additional source of income that could help to set you up for later life.