With the additional 3% stamp duty introduced in April on second homes, and recent huge property price increases, the buy to let market has taken a few severe blows, but month on month, the market is slowly recovering. Surveys suggest that by 2021, as many as one in four people in the UK will be renting, so buy to let could represent a major investment opportunity.
Do your homework and find a location with a demand for rental properties. Decide whether you are going to manage the property yourself, or hire someone else to manage it, remembering that if you are managing yourself, the property would be better nearer to where you live. Deciding on what kind of tenant you are aiming for will determine the location you choose. A sought after location with properties near good transport links and near amenities, like shops, pubs and restaurants, and locations with growing employment opportunities, will attract long-term tenants, whereas locations near universities will attract students, leaving you with no rent during summer months.
Single-family homes will attract long-term renters, and a couple is financially more viable than a single person, as they will have more income between them. What sort of property is best for buy to rent? A new build will have fewer maintenance problems and will be available to rent immediately, whereas older houses have more character. If you are prepared to do a bit of work, a bargain can be had with a character home in need of renovation. A house with a small garden, shed and off road parking will be more appealing to a family, whereas a flat would suit single individuals.
Look at several properties before you make a definite decision and remember you are in a strong negotiating position, having no chain, so drive a hard bargain. Regardless of what part of the country you live, estate agents are plentiful. If you are looking for buy to rent houses in Gloucester, for example, http://www.tgres.co.uk/properties-to-rent have many properties available.
If you are financing the house with a mortgage, make sure you acquire the best rate and remember that landlords can no longer offset their full interest bill against tax. Don’t overstretch your budget, as there will be unexpected bills, like maintenance and insurance, and periods when the property is empty.