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Investment Tips For Buy To Let Investors
Is your time as a Buy-To-Let property millionaire just around the corner? Stocks and shares are unpredictable and inflation is forcing low interest rates so more people are considering this opportunity. At Cairn we help people with all degrees of experience in investing in residential property to negotiate the challenges of the BTL market. Here are our top tips:
Research, research, research
Before you dive into OnTheMarket.com while speed dialling your bank, stop. Identify now what kind of return you want and whether alternative investments are more suitable. Talk to people who have invested and to property experts like Cairn who can help you to understand what to expect before you jump in.
Find the right location for you
Decided you want to become a BTL investor? Now identify an area with appeal. It’s important that you identify a property where potential tenants want to live so consider towns with good commuting links, near to educational institutions or popular with families. Asking knowledgeable property experts can open up more possibilities. We have developed Property Partners across Scotland who offer specialist local knowledge and can help you to realise your property investment goals.
When you do consult experts be open to suggestions. A property up near your home, in an area you know might be attractive but not the best investment.
Looking at property development opportunities can be beneficial. You’re more likely to be able to negotiate a good deal and add capital value at an early stage if you buy a property that needs work. We offer property development services and have access to reliable local tradespeople.
Do your sums
Do more research, and do it now! Find out how much rent you are likely to get in the area that you’re looking in and the cost of properties. Typically rent should cover 125% of the mortgage repayments.
If you’re considering property development a rough calculation to follow is that the value of the refurbished property should be at least the purchase price, plus the cost of work, plus an additional 20%. It’s important to consider maintenance costs and potential rent voids and factor these in. If your sums don’t add up go back to the drawing board.
Your own bank probably will offer a BTL mortgage, however, that doesn’t mean it’s the best deal! Shop around and only when you’ve done your research speak to an independent broker too. They can help you to decide what type of mortgage will suit your needs.