The process of purchasing an investment property is very different to that of buying a home for example, for you and your family to live in. There are many other considerations that must be taken into account before making this big step. Thorough research of the market is essential. Even if you decide to borrow a substantial segment of the purchase price of the house, it will usually cost you a considerable amount to set yourself up as a landlord. It is always a good idea to approach a number of letting agents in the proposed area you wish to buy, in order to gain an insight into rental demand – this is also a good way of finding out how much rental income you can expect. Many lenders will expect rental income to cover at least 130 percent of your monthly mortgage repayments – so make sure that you calculate your sums correctly. Once you have made your calculations and found a suitable area you wish to buy in, you can start shopping around for mortgages. There are many different buy-to-let mortgage deals that can be arranged – You can choose between fixed, discounted and variable rates.As with other types of mortgages, it will be a condition of the lender that you have in place a buildings insurance policy at the very least. Contents cover is also highly recommended however it is not usually obligatory. 1. Stay clear of areas that are already saturated with buy-to-let properties – supply can often outweigh demand, which could make finding tenants a difficult task.3. When decorating, it is a good idea to invest that little bit extra. Ask yourself, could you see yourself living there? If not then you may wish to review your decor.
4. Join a landlords association. For about 100.00 a year you will have access to help and assistance on matters such as tax issues and legislation.