Jarlands Guide to Becoming a Buy to Let Investor
Is buy-to-let right for me?
Firstly, property investment isn’t a decision to be taken lightly, and must be well considered before putting two feet in. Many believe it to be an easy path to making money, however it is a business in its own right and you must approach with your eyes open, not focusing purely on the financial gains associated to it. If your objectives are clear to begin with, you are more likely to get what you seek from your property.
Key tips to become a successful landlord
· Plan your finances - know from the offset what your intentions are. Will your money be used as your regular income or will it be set aside as capital growth?
· Conduct research – find out the applicable laws around buy-to-let, and if needed, appoint a letting agent to keep on top of the rules and regulations.
· Get advice – speak to a mortgage adviser and an accountant to get a full picture on your financial situation and the options available. The property investment market can fluctuate depending on economic conditions so it is important to speak to a mortgage adviser to protect your finances and sufficiently insure your property should the market worsen.
· Exit plan – it is wise to consider how you will exit the buy-to-let market should you need to. Creating an exit plan alongside an entry plan will allow you to settle finances in a tax-efficient manner.
Actions to avoid:
· Diving in to a property – only purchase a property after due consideration. Take professional mortgage advice and understand the tax implications, responsibilities and costs involved with becoming a landlord.
· Having insufficient financial protection – plan for the worst-case scenario, talk through protection policies available with your mortgage adviser.
· Being out of the loop with laws and regulations – always keep an eye out for new laws that you must adhere to.
· Not understanding what being a landlord entails – from a moral and legal standpoint – you must keep the property in good condition and maintain a paperwork trail accordingly,
and being prepared to work with your tenants for whom it is their temporary home.