If you are looking to purchase a property for buy to let, there are a few things that you need to do and be aware of before you make the big step. Firstly the finance is completely different and you cannot use a conventional mortgage on a buy to let property likewise with the insurance on the property as well. A mortgage for a rental property normally has much higher rates than a residential one. Therefore for the bank to be able to lend you the money for it, you will have to prove that you are a serious investor and put down a larger deposit on the property than you normally would for a normal property. One aspect of a buy to let mortgage that may benefit to the purchaser would be that they are often interested only mortgages. This means that you will only have the repay the interest on the property and not the capital loan, the capital can be paid back at the end of the agreement by selling the property.
You will also need to prepare yourself with a business strategy, this is because the bank will see you as a business partner, one of which hopes will be fit and healthy by the end of the agreement. Are you targeting professionals, students, married couples or commuters? If you don’t have a niche market in mind, you need to get one before you go any further. This will determine where and what you buy. There is no point buying a flat for wealthy young professionals in bedsit land, or a property aimed at families in a row of student houses.
If you are interested in getting more advice and information from us please get in contact, one of our advisors will be able to help you.
