Setting up for buy to let success

When considering getting involved with buy to let property investment there is a temptation to start by diving online and finding a good-looking property. Finding a property is, in fact, way down the line of a whole list of prior activities that need to be completed when setting up for buy to let success. That is not to diminish the importance of finding the right property it is just that a whole lot needs to happen before that point.

Here is a quick check list of things to consider and plan when setting up for buy to let success.

Investment brief

What is your primary motivation for the investment – rental return or capital growth?
What is the minimum length of time that you expect to hold the investment? In today’s market we strongly recommend that this shouldn’t be shorter than five years.
Review which key investment areas work best for your budget and objectives – there are cheaper entry points in some northern cities for example
Identify any sourcing constraints from lenders/banks.

Finance

What amount of capital are you comfortable with investing?
Can you raise this from savings/encashment of other investments etc. or is refinancing required to raise the desired deposit and meet the initial costs (stamp duty, legal costs etc.)
Review how the investment can best be financed – if through a buy to let mortgage identify the size of deposit required.
Compare the criteria and processes of different lenders to find the best amount and terms of loan available.
Identify the tax implications on the different options for financing the investment
Agree a budget and timescale for finances.

Tax

Identify the short and long-term tax implications
Minimise the tax you pay by looking at investing through a limited company or in your partner’s name if they are in a lower tax bracket.
Determine the purchase structure that best meets your personal taxation situation
Identify the tax liability on exiting the investment
Understand what is and isn’t tax deductible on your buy to let investment.

Sourcing

One of the key decisions is to determine which region works best for your budget and objectives.
Based on your criteria and budget certain areas may be ruled out as too expensive so be realistic and only look seriously at the locations you can afford.
Research the selected areas very thoroughly taking account of the ideal type of tenant you are seeking, professional, family, student etc.
Which type of property, flat, house, bungalow, new, off plan, existing, old and in need of refurbishment/renovation and consider whether it is near to transport links, schools, hospitals, in town, out of town based on the type of tenant that you are seeking.

Finally ….

NOW you are ready to go on line and find the property which best meets your budget and criteria.

Need Help?

We have a team who are expert in every aspect of finding, letting and managing investment property in the UK.
They will guide you through the process, help you plan budgets, tax, sourcing and find you the property that best meets your requirements so if you want to set up for buy to let success get in touch with them at https://sourceinvestments.com/contact/