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Many people believe that money invested into property is a good, stable long term investment. Of course property prices can go down as well as up and no one can give us a definite prediction.
UK property market has experienced rapid growth in the past several years and those who managed to board that train on time have seen a very good return on their investment.
Unfortunately credit crunch has affected many areas, including property market and we have seen reductions in property prices. Some amateur investors got worried, but others saw it as an opportunity to increase and diversify their portfolio.
Decision to invest into property almost always leads to a question of finance, whether you want to use your inheritance or borrow funds from the lender. There is no right or right answer, as a lot depends on your goal and your personal circumstances.
Buy to let mortgage have been designed especially for people who are looking to invest into property and rent it out. Availability of buy to let mortgage has allowed many people to acquire a property with relatively small amounts of money as just a few years ago it was possible to purchase buy to let with a deposit of just 10%.
How difficult is it to secure a buy to let mortgage? One of buy to let mortgage lender’s requirements is that mortgage payments will be covered by your rental income by 125%, basically they want to see that you will not have to rely on your own funds to pay this mortgage. However, they will check your own salary and will asses if you will be able to maintain mortgage payments if property will be occasionally empty when one tenant leaves, but the other has not moved in yet. For that reason they will expect that your wages will be about £20,000 with some asking less and others as much as £35,000.
Buy to let property can be purchased and mortgaged by a single person or jointly by a couple or just by friends.
Our buy to let and commercial mortgage specialists will make this process easy for you as you will not need to run around dozens of banks and spend our on the phone, we will do it all for you. Our brokers are specialising in commercial finance and buy to let, so they will be able to point you in the right direction and find the best buy to let or commercial mortgage available on the market.
Landlords are required to purchase a building insurance, while tenants are expected to buy their own content cover if property is rented unfurnished. However, some buy to let owners prefer to have building and content cover as they rent property fully furnished.
If you are new to buy to let, choose your property carefully and do your research. Location is crucial and your success can actually depend on it. Also choose your agent very carefully, check his reputation and make sure that he will suit your requirements. For example, if your buy to let property is located quite a distance from your home, you will need to rely on your agent to sort small problems, collect rent and look after your tenants.