Despite the fall in house prices in the last few months of 2005, recent studies suggest that house prices in 2006 are set to rise. With all the rising and falling it can be hard to weigh up the advantages and disadvantages of buy to let properties. We examine what you need to take into account when considering buy to let properties and where to turn for reliable property and mortgage advice.
There is no denying that deciding to invest in buy to let properties is certainly a big commitment and the investor would be naive in thinking that it is just financial commitment, as any investment involving people inevitably leads to more involvement than simply investing in stocks and shares. So before you make any decision about investing in buy to let properties it important that you see the commitment for what it is: long-term work. It is not a get quick rich scheme, it is a long-term investment of your time and money which if managed and planned correctly should yield a reasonable source of second income.
Once you have established that the investment in buy to let properties is one which you are fully informed about and happy to make, you need to begin to plan your next steps for purchasing the right property. The key at the purchase stage of buy to let properties investment is to ensure that you fully research all aspects of the purchase from the property itself down to the mortgage that you decide to apply for and take advice accordingly. An essential part of this research will involve deciding on an area which is best suited to buy to let properties. Your local estate agents are likely to have this kind of information and correctly advise you on the type of property you can buy within a desirable buy to let area for the amount of money that you have and can borrow. Armed with this information you can then begin to search out the houses which are appropriate to your buy to let needs. You should avoid buying a house that you would deem to be suitable to your personal house buying preference and instead consider what attributes the house will need for buy to let purposes. Again the estate agents should be able to offer you advice on this.
The mortgage required for buy to let properties is different to your average domestic mortgage which is why it is always advisable to visit a specialist buy to let mortgage broker. A specialist broker will have contact with a wide range of buy to let mortgage lenders and will know which lender is most suitable to your individual set of circumstances. It should be noted however that you will normally be required to put down a 15% deposit on your buy to let mortgage and that these type of mortgages are more likely to be subjected to a higher rate of interest than a domestic mortgage. The amount you will be able to borrow will be dependant on your current salary or the amount of rent you are likely to be able to charge, or both. A specialist mortgage broker will be able to guide on the type of buy to let properties mortgage you will be able to acquire and find a suitable mortgage to suit your buy to let needs.