Changes in government legislation in recent years, including tax reforms, stricter mortgage criteria and increases in stamp duty, mean things have been tougher for buy-to-let landlords, so it is harder to make a profit on their investment. However, it is still possible for landlords to make money in the buy-to-let market, but these changes, along with the continuing reforms, mean that it is even more important to choose the property wisely and carefully consider the process.
Know the Regulations
Before purchasing a buy-to-let property it is essential you familiarise yourself with the up-to-date requirements to ensure you are confident you can adhere to the regulations.
Rules and legal requirements are constantly changing, such as the new ban on certain tenant fees, so it is vital to be familiar with the latest legislation.
Location, Location, Location
Consider carefully the area you are going to purchase the property in. A buy-to-let property is not for you to live so does not necessarily need to be in the area in which you live. You will want to ensure you purchase a property in an area that is appealing to prospective tenants and where there is a high demand for rental properties. You should consider whether you will have the rental managed by an agent, which will, of course, involve additional costs, or whether you will be managing the rental property yourself. If you are managing the property yourself, it is wise to ensure the property is within a reasonable distance as you will need to be on hand if tenants have any problems.
Find the Right Property and Maintain It
To maximise your earning potential from a buy-to-let property, you need to make sure you find the right property and ensure it is suitable for your prospective tenants. Landlords should protect the property and ensure it is appropriately maintained. You also need a thorough property inventory for each tenant. Landlords and agents often wonder, where can I find property inventory software online? However, reliable property inventory software can be found easily online to ensure the property can be correctly maintained.
Consider All Costs
There are considerable costs involved in renting properties. A buy-to-let landlord must have specialised insurance policies, and if the property is a second home, they will be liable to pay an increased rate of Stamp Duty.