Page 32 - Redbrik Lifestyle & Property Magazine: Spring 2019

32
INVESTING IN LETTINGS
WRITTEN BY
PETER LEE
PETER.LEE@REDBRIK.CO.UK
If I had a penny for every time someone has asked me if buying a property to let is a sound investment, I would be a very rich man!
Greater demand from tenants, rents
that should rise with inflation and the long horizon for interest rate rises have definitely helped bolster the attraction of the buy-to-let proposition with returns on savings at an all-time low.
If you prefer an investment that feels more tangible than stocks and shares, you are willing to tie your money up for a long period of time and you understand and accept the costs and time involved in owning and running a property, then you should consider buy-to-let as a sound medium to long-term investment as it can generate an ongoing passive income.
Like any investment, buy-to-let comes with no guarantees, but for those who have faith in bricks and mortar, here are my top tips for success.
1. RESEARCH THE MARKET ON BUY-TO-LET
If you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits?
If you know someone who has invested in buy-to-let or let a property before, ask them about their experiences - warts and all. At Redbrik we offer expert advice and can assist you every step of the way on your buy- to-let journey.
2. DO THE MATHS ON BUY-TO-LET
Before you think about looking around properties sit down with a pen and paper and write down the cost of houses you are looking at and the rent you are likely to get
Buy-to-let lenders typically want rent to cover 125 per cent of the mortgage repayments - often now 150 per
cent - and most now demand 25
per cent deposits, or even larger, for rates considerably above residential mortgage deals.
Once you have the mortgage rate
and likely rent sorted then you must be clinical in deciding whether your investment will work out?
Don’t forget to factor in maintenance costs and what will happen if the property sits empty for a month or two?
These are all things to consider.
Make sure you know how much the mortgage repayments will be and if it is a tracker allow for rates to rise.
3. CONSIDER HOW HANDS-ON A LANDLORD YOU WANT TO BE
Buying a property is only the first step. Will you rent it out yourself or get an agent to do so?
At Redbrik we offer a full property management service. Our expert Lettings team provide a concierge- style service, entirely tailored to you. We really do look after your property and the needs of your Tenant.
4. THINK ABOUT YOUR TARGET TENANT
Instead of imagining whether you
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