Top 5 things to consider when looking at a potential buy to let investment02 Feb 2017
You have seen a property which you think might make a great buy to let investment and you are seriously interested, what should you look out for? (I’m assuming that you have a plan in place and you know exactly why you are getting into buy to let! If you haven’t don’t even start viewing!!)
- #1. Do the numbers work? If you think a flat looks great but the numbers don’t work for you, DON’T even bother looking!! Buy to Let should be a completely unemotional purchase so if it’s going to cost you £130k and only generate you £550pcm in rent and you are ideally looking for a decent yield, this is not the flat for you, even if it’s totally gorgeous!
- #2. What are the factor fees (assuming there is a factor and if not, why not?) If the factors fees are £100 per month, you, the landlord, are going to have to pay these, even if your rent isn’t coming in. Does that still make financial sense (see #1?)
- #3. You have thought about #1 and #2 and all is looking good, have you looked thoroughly at the Home Report? Yep they are long and boring but there is a lot of good stuff in there, not just the valuation. The home report will tell you about communal repairs, how the building is from the outside, not just what the décor is looking like and whether the kitchen is newish! It will also usually give you good information about what works the current owner has done to keep the property up to a decent standard. If the information on the survey is limited maybe it’s a repossession or has been owned by a developed or investor…All useful for making your decision on what and whether to offer. The flat might look good internally, but if the home report flags up a major issue with the roof or skylight you might be wasting your time.
- #4. Viewing time! You’ve reached the exciting time of arranging viewing! Ideally arrange to view in the daytime so you can get a good look, and make sure you go a little early to do a quick look around the area and communal area if there are any. Take your time… look beyond the blinds and furniture- they are not yours and they are not being bought! Look at the windows, the boiler, the kitchen and bathroom. Check out the paintwork and have a good smell – any sign of damp?! Does it feel safe and secure? Would you be comfortable walking in the door? The décor can be changed cheaply and easily so don’t let that impact your decision.
- #5. Your offer…this is it. You like it, it makes financial sense. STOP. Its only makes financial sense if you offer what you have worked out in yoru figures, don’t get talked into increasing your offer if it doesn’t make sense. Remember you have to add in your extra 3% LBTT, conveyancing, furnishings, making sure it meets regulations, agent fees, tax etc. Know what you will pay and then don’t increase it any more!!
Good luck!! Happy Buy to Let shopping!
Any advice firstname.lastname@example.org or if it all sounds like too much hard work, give me a call 0778 755 23 23!