Decide how you will finance the investment
Once you have decided you are going to go ahead with purchasing a property to let, your next step is deciding how to finance your new investment. Your two main options being either cash or obtaining a buy to let mortgage. However, considering the average property price in the UK is over £150,000 a mortgage tends to be a more viable option. Another preferred method of payment may be a deposit payment, which is significantly less than the full property price. In such instance you legally take possession of the building, refurbish it (if needed) and rent the property out. However, it is essential to keep in mind that taking out a mortgage, though recommended, still comes with a bit of risk.
That’s where a mortgage broker like us comes in handy with our access to exclusive deals and vast market knowledge. We can provide you with all of the information you need along with the most suitable rates and options for you, individual to your situation.
Buy-To-Let industry changes
The buy-to-let property landscape is changing rapidly with the introduction of new regulations and laws. The latest in a series of tax changes has led to:
- an increase in stamp duty payable by buy-to-let purchasers,
- a stricter lending criteria for lending,
- restrictions on interest relieve against rent (Section 24 of the Tax Act)
All of these add up to more costs for the investor. Keeping an eye out on these new tax laws and figuring out ways to take advantage of these changes is crucial to maintaining a positive return on investment.
Finally, remember, you are responsible for the maintenance and repairs on the house, there’s the monthly interest payment, and of course other sundry costs you’d incur managing your portfolio. It is essential to have adequate funds available to keep things running even during those days when the house is empty. All of these costs make finding the most suitable deal on your buy to let mortgage more important than ever!
Your home may be repossessed if you do not keep up repayments on your mortgage.