Buy To Let Tips


Network, Network, Network – with the estate agent

The Internet is the most productive tool. You can view and assess 1000’s of properties for rental purposes in a few clicks BUT there is no substitute for going out and meeting the estate agent.

Talk and walk like them

You must eventually do as they do and build up good relationships. The Estate Agents TELEPHONE is part of his life, so stay in touch by the TELEPHONE or your ruin his life.

Clickety click – what makes him tick?

Estate agents have favourite buyers. To be a favourite buyer doesn’t take 100’s of property transactions it takes ‘CREEPING’. You must make him/her feel good when they are CRAP. This is hard because they can read you like a book and only true sincerity can really shine.

Point to remember: Definition of an Estate Agent: Hard shelled, soft centered clever ‘dickies’.

Interest Only whilst you are adding value

Fundamentally there are two types of mortgages: repayment or interest only. Of course you have many options: fixed, discounted etc, but any option sits on either a repayment or interest only mortgage. The first task is to select which of these suits you best. You may decide, as most landlords do, to pay interest only whilst you are setting up house ie. decorating, furnishing, letting etc.

Bring in the experts

Don’t try and be an all rounder, whilst your mortgage broker may be a whiz kid with the figures he/she won’t have a clue on how to renovate a terrace house in Coulsdon! So don’t go it alone use the services of brokers, Solicitors, Plumbers, Builders, Valuers, Electrician etc..

High Risk Borrowers

If you are self employed and don’t have three years of accounts, do freelance work or contract work you may have been considered a high risk IF buying a home to live in. Luckily buy to let lending is very different. In today’s market you are only considered high risk if you have a poor credit rating. The buy to let mortgage lenders have come to accept that personal income does not, in itself, create a high/low risk. It is considered that the rent from letting the property will create sufficient surplus income that it satisfies the lenders concern ie. your can service the debt (buy to let mortgage).

The buy to let property market has become very competitive and rents are very close to mortgage payments. Whilst the margin for profit seems to be holding up well it does however mean that paying over the odds on your monthly mortgage repayment could create a deficit. This tends to happen if you have a poor credit rating.

Words of wisdom:  Repair your credit rating prior to embarking on a series of property investments. This may simply mean waiting but best to have a mortgage broker or a specialist debt adviser have a look at your credit file.