Most commonly, the reasons for investing in this type of property are:
- Production of capital growth
- Production of a regular income stream
- Combination of income with growth
- Long term retirement fund
It is vital to conduct localised research, for example:
- Is there a real requirement for rental properties?
- Is the area in growth or decline?
- What are comparative rental prices in the area?
- Are new regional developments planned?
- What is the state of local employment?
- What are the risks of negative equity if prices reduce?
- How long do I intend to hold the property?
- Is the area liable to flooding / subsidence etc?
So, what are the main rules to consider prior to investment?
- Research the market
- Select the most promising geographic area
- Do your sums - most lenders want rentals to cover around 125% of mortgage payments, will the area stand this, and do you have enough deposit?
- Consider the target market - what type of tenant will you attract
- Carefully select the target area
- Negotiate - you are in the driving seat - this is an investment and you are not looking for somewhere for you to live
- Consider your ability to live with a long-term investment - how will you cope with a fall in property values?
- Consider a set aside sum for property maintenance and how will you cope if there are significant time delays between tenants?
In spite of all of the recent mortgage publicity, Buy to Let Mortgages, or Buy to Let remortgages remain keenly priced
At Pinnacle Finance we have advisors on hand who are experienced in this market sector who will be pleased to offer as much help and support as you need
If you are new to this sector or are just increasing your current port-folio, don’t delay, contact Pinnacle TODAY
Click the button below to fill out our 1 minute short form or call us on 08700 270 172
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