| For Buy to Let market, the last few months | | | | Avoid all cost areas with oversupply of properties |
| have been difficult for the landlords with the credit | | | | to let, look at properties and letting agents' |
| crunch came increase on arrears, lack of buy to | | | | websites and if a certain area has numerous |
| let mortgages and tougher lender's criteria. But it | | | | properties to let, think if you want that kind of |
| is not all bad news, the houses are cheaper to | | | | competition as you may have to negotiate the |
| buy, the rents still increasing and rental demand at | | | | rent down to let the property. |
| all time high. | | | | Look at the figures Before you buy, take a look |
| Credit Crunch Last year, we started to see the | | | | at several properties, writing down the ones are |
| effects of too much borrowing and declining in | | | | of your interest. Look at the rental yields on |
| house prices in USA. One year later, economies | | | | them, see if the rental income covers at least |
| throughout the world started to collapse, financial | | | | 125% of the mortgage payments and if worth to |
| institutions going into administration, Governments | | | | spend around 25% on a deposit, this will help you |
| in the verge of bankruptcy, mortgage lending at | | | | to secure finance and a good rental yield. Many |
| very low levels, UK house prices coming down | | | | lenders restricted the Loan to values to 75% or |
| and a global recession. It's all bad news, no! The | | | | less and rental cover to 120%-125%, you can still |
| buy to let market is stronger than ever with the | | | | arrange products with less rental cover but think |
| demand for rental properties being higher than | | | | if you want to restrict your rental yield. |
| ever, due to first time buyers not moving into | | | | Your target tenant Think who will be your tenant |
| the ladder and immigration from east European | | | | and imagine in his shoes? If you are student you |
| countries. Within a dreadful situation, we can | | | | like a place to be comfortable and clean, links to |
| always find good opportunities. | | | | university, nothing luxurious. If you are a |
| 2009 New Year, New Hopes! It will be into 2009 | | | | professional you will be looking at a modern and |
| that we shall see some improvement on the | | | | stylish interior but nothing too pretentious, and |
| lending, specially buy to let mortgages. It's been | | | | excellent links. If it is for a family rental, do not |
| predicted the houses prices will still coming down | | | | put any furniture in, leave as a blank canvas, |
| but at much lower pace and probably in 2010 | | | | normally over the years the family has a few |
| they may start coming up. For the landlords it's a | | | | belongings they want to take to the next |
| time to consolidate and review their portfolio with | | | | property. |
| great opportunities to invest if you are in strong | | | | Look into your portfolio Review your portfolio, |
| position. | | | | see if the initial rate deals in any of the |
| Buy to let Market Between 2004 and 2006 the | | | | mortgaged properties ended and compare the |
| buy to let boomed, due to easily accessible buy | | | | rate you are or will be paying with the rates |
| to let mortgages and property prices growth. | | | | currently in the market. If you are better off with |
| Now the buy to let mortgage diminish, tougher | | | | the lender's Standard Variable rate, does not |
| lenders' criteria, specially rental cover, and house | | | | mean you stop looking for a better deal. Try to |
| prices are coming down. | | | | look once a month for new rates or ask to your |
| Buy-to-let is no longer sizzling and many investors | | | | adviser to keep an eye on the products. See if |
| that started being a landlord in recent years are | | | | there is any opportunity within your portfolio to |
| struggling as mortgage rates rise. Many could not | | | | get a higher rental income. Why not transform a |
| change mortgages due to low or negative equity, | | | | house with 3 bedrooms, 1 dining and 1 living room |
| so when the initial rate deal came to an end and | | | | into a 4 bedroom house with living/dining room; |
| they started to pay the Standard Variable rate of | | | | make a loft conversion/extension to get 1 or 2 |
| the Lender, the rent was not enough to cover | | | | more bedrooms; renting by the room, as by the |
| the mortgage payments. | | | | room the rental income is normally higher (but |
| Within the most affected are those investors | | | | must be on right area). The possibilities are |
| who bought properties at a suppose discount to | | | | immense to add value to your portfolio and |
| sale straight away, looking for short term | | | | increase your rental income without spending as |
| investment but when properties prices started to | | | | much money as buying another property. |
| come down and the houses taking longer to sale, | | | | Look at other areas Most Landlords invest where |
| they run to serious problems. | | | | they live but most of the good opportunities are |
| The golden rule of buy to let investment is to | | | | normally in other areas. Do not be afraid, as if |
| look as a long-term investment, taking seriously. If | | | | you follow the golden rule, can be very time |
| the landlords invest wisely, look at long term, do | | | | consuming investing areas away but can be |
| the homework and stick to the tried and tested | | | | worthwhile. |
| method of investing for rental returns rather than | | | | Ask for a discount When you buy an investment |
| capital growth, they will be successful. Otherwise, | | | | property, you must not forget you enjoy the |
| the investor will probably run into serious | | | | same benefits of a First time buyer - No chains, |
| problems. Buy to let investment does not | | | | so you can move quickly. If you do not ask for a |
| guaranteed success as any other investment but | | | | discount you will not have it. |
| doing it well and it can be an excellent piggy bank | | | | Avoid Tenancy pitfalls Put aside at least 2 months |
| for retirement. | | | | of rent, in case when your tenant move out or |
| I am leaving now some tips for all professional or | | | | when you just bought a property will help |
| first time landlords: | | | | towards the mortgage payments until you find a |
| Do your homework If you are a first time | | | | tenant. Worth paying for a complete tenant check |
| landlord look at pitfalls before you look at the | | | | report, where the provider will get you a credit |
| benefits, buy to let investments are time | | | | file of the prospective tenants, check their ID, get |
| consuming, therefore think if it is the right time to | | | | the references and they are not expensive. It is |
| invest in buy to let or leave the money on a good | | | | not guaranteed you will be good tenants but helps |
| savings account. If you are already a seasoned | | | | a lot. Also, you should consider a rent guaranteed |
| landlord, do not stretch yourself, look first to | | | | insurance, where can cover for rent arrears, pay |
| consolidate and add strength to your portfolio, as | | | | towards the legal costs to evict the tenants and |
| if you are in stronger position your next | | | | damage made on the property. With this type of |
| investment will run smoothly. Location, Location, | | | | insurance you may request a lower deposit from |
| Location | | | | the tenants to match the excess of the |
| It pays to choose carefully where your next buy | | | | insurance, that may help to secure a tenancy |
| to let property will be. This does not mean to buy | | | | quicker. |
| on a cheaper or expensive location but rather the | | | | Shop around Shop around for letting agents, ask a |
| rental demand in the area. Look for clues like if is | | | | discount to traders: plumbers, furniture. The more |
| near a University or Hospital, very trendy area | | | | you save the higher will be the return from the |
| for professionals, excellent amenities and links, etc. | | | | investment. |