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Top tips for new buy-to-let landlords looking for a stress free life
March 19, 2015Article by Charlotte Ashton
Becoming a buy-to-let landlord is about more than simply finding and purchasing the right property. Of course, that element is important, as is timing your purchase correctly in terms of the property market’s movement, but understanding what happens next is also key, as Ray Withers, Chief Executive of specialist property investment company Property Frontiers, explains,
“Many of those who are new to the buy-to-let market are focused solely on purchasing the right property that will earn them high yields. They haven’t thought through their legal and indeed their moral responsibilities as a landlord. Buying the property is the first step in the process, not the last.”
With the UK’s private rented sector growing every year and many new property investors becoming landlords for the first time, the need for a structured, detailed approach to investing in buy-to-let property has never been greater. Property Frontiers has produced some excellent documentation in this area, such as the UK buy-to-let insight guide, but now Chief Executive Ray Withers has added to this by providing his top tips for new landlords.
Top tips for buy-to-let landlords
Firstly, think through how involved you want to be as a landlord. Do you want to be responsible for drawing up tenancy agreements, advertising the property, collecting rent, undertaking repairs and so forth, or would you rather engage a management company to do all of this on your behalf?
Fully managed options can still return impressive yields, such as Custom Quay in Manchester, which offers 6.5% yields with full management option available. Opting for an opportunity such as this can significantly reduce the stress of being a landlord, particularly for those who are new to property investment.
Secondly, understand your legal obligations. In Liverpool for example, where Property Frontiers is offering these stunning L1 apartments, all private landlords will have to obtain a licence from 1 April 2015. Be sure to invest with a company that looks ahead and supports you to understand such commitments in order to avoid any sudden surprises.
The upcoming requirement for all landlords to install smoke and carbon monoxide alarms in their rental properties is another great example of this. At present only 82% of landlords do so, according to the 2013 English Housing Survey estimates, but from some time around this October the installation of alarms will become compulsory. Again, opting to invest through a forward-thinking company can pay dividends for matters such as this.
Next, be sure to remember the basics. Understand the area in which you have invested. What is the average asking rent? How long does the average property take to find a tenant? What will set your chosen investment apart from the other properties on offer in that city?
This kind of research needs to be ongoing in order that you can continue to pitch your buy-to-let property at the right audience and for the right level of rent. In London, for example, Rise @ Deptford stands out from the crowd by being the first property of its kind in the capital thanks to its provision of direct access to Deptford station.
Finally, always think two properties ahead. Done right, property investment is a lucrative and enjoyable venture, so plan strategically and think beyond your current buy-to-let investment. It might make more sense, for example, to opt for an investment like these high end apartments in Bicester, which have up to 75% LTV mortgage finance available, rather than tying up all of your capital in your first property. Property Frontiers’ investment consultants are on hand to support with such proactive planning.