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Top Tips For Buy To Let Brits

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John Filinski  landlord insurance policy  rent guarantee insurance  buy to let investors  First Time Buyers 

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Top Tips For Buy To Let Brits

Buy to let is hotter than ever before in the UK, as commentators talk not only of the vast number of people forced into renting by credit conditions, but often of generation rent. The average age for a Brit to buy his or her first house without any assistance from parents is now 37. With just 543,000 mortgages approved last year, compared to 2007's total of 1.013 million, and the still-difficult employment conditions forcing many to move around for work, this figure looks unlikely to be falling anytime soon.

So, more tenants means more landlords, and indeed the private rented sector is becoming increasingly important to UK housing as time goes on and not only more people rent but we all live longer and work longer also. As a result more and more investors, from the biggest institutions to the smallest armchair are flooding investment into buy to let properties around the UK. Join IPIN Global TodayThis guide is predominantly for the latter.

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Tips From Around the Web:

  1. "Never fall in love with the house that you're going to buy and let out. This business is all about yield and mathematics. Don't set your heart on one property – identify 10 that are suitable, and maybe you'll get one". Landlord of 20 years John Filinski.
  2. "Don't be too nice to your tenants. I don't mean ignoring their calls. You need to know if something has gone wrong, because you will have to pay to put it right". Landlord of 20 years John Filinski.
  3. Face to face contact is essential. Common sentiment in the landlording fraternity.

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Telegraph Top Tips:

  1. Buy properties no more than 40 minutes' drive away. Or be prepared to employ a letting agent.
  2. Research the area. Don't just drive around, spend a few days there, talking to residents, shopkeepers, estate agents, people in pubs.
  3. Check your tenants' references. How genuine are they? Could they have been faked by a friend? Is their previous landlord giving them a good reference just to get rid of them?
  4. Get a guarantor's covenant, preferably from a relative; someone who can vouch for the tenant's character.
  5. Don't be a stranger. Introduce yourself in person to your tenants to help form relationships.
  6. Beware cash up front. It's tempting, but someone offering six months' rent in advance, in GBP 10 notes, may be hiding something.
  7. Build a team of electricians, plumbers, carpenters, boiler-repairers and decorators whom you can trust. They will save you money later.

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IPIN Global Top Tips

  1. Do the maths carefully
    it is essential that you calculate the financial viability of an investment and leave yourself plenty of wiggle room. Decide in advance if you will use a letting agent and budget £250 per month per property for maintenance.
  2. Consider the use of letting agent carefully
    It is easy to balk at the cost of a letting agent and immediately decide to go it alone, but choosing a good letting agent could be the difference between a successful investment and an empty vacuum sucking the life out of you. Just because properties practically rent themselves out now doesn't mean it will always be like that so look at the pros and cons of a letting agent, decide if you can perform their role effectively around other commitments, or find an investment that is viable even with a letting agent's 10 percent cut.
  3. Think About your Target Tenant not Yourself
    Expanding on the first tip from Landlord of 20 years John Filinski, instead of imagining whether you would like to live in your investment property, put yourself in the shoes of your target tenant

    Who are they and what do they want? If they are students, it needs to be easy to clean and comfortable but not luxurious. If they are young professionals it should be modern and stylish but not overbearing. If it is a family they will have plenty of their own belongings and need a blank canvas.

    Remember that allowing tenants to make their mark on a property, such as painting, or adding pictures or taking out unwanted furniture makes it feel more like home - these tenants will stay for longer, which is great news for a landlord.

  4. Consider Landlord and Rent Guarantee Insurance
    Most insurance providers now offer comprehensive landlord insurance covering unexpected major maintenance work including boiler repairs. It is also possible to take out an insurance policy against your tenant failing to pay the rent, usually known as rent guarantee insurance. This can cost as little as GBP 50, and is available as a standalone product from a specialist provider, or as part of a wider landlord insurance policy.
  5. Haggle Over Price
    Buy to let investors have the same advantage when buying a home as first time buyers; they are not part of a chain, and the fact that their purchase isn't reliant on another sale is a bargaining chip and should be used to haggle on price to get a better deal. Remember: the lower price you pay the better your yields are.

Buy-to-let hotspots

Location 

Property price 

Average rent (monthly) 

Average rental gross yield 

1. Southampton 

£138,311 

£901 

7.82% 

2. Blackpool 

£75,943 

£494 

7.81% 

3. Kingston upon Hull 

£69,519 

£450 

7.7% 

4. Manchester 

£102,631 

£650 

7.60% 

5. Nottingham 

£83,313 

£524 

7.55% 

6. Coventry 

£104,970 

£624 

7.13% 

7. Slough 

£171,581 

£975 

6.82% 

8. Oxford 

£244,893 

£1,375 

6.74% 

9. Liverpool 

£91,012 

£498 

6.57% 

10. Portsmouth

£141,971 

£775 

6.55% 

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN Global is not licensed to give financial advice and all information provided by IPIN Global regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.