The Greater Bristol Letting Agency
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Accommodation Unlimited Letting Agents

The Top Ten Tips to Buy to Let Success you Need

Who would want to invest in buy to let properties now?  With the uncertainty around Brexit, new tax laws on mortgage interest, and an extra 3% stamp duty, this is no time to invest in B2L right?  Well no, as the casual investor gets scared off, the serious investor can look for value so now could definitely be the time.  Canny investors don’t rush in though, they do their research and treat buy to let like any other investment.   

If you are the type of person that thinks “How difficult can buy to let be?   Just buy a property and watch the cash roll in” leave this page there is nothing to see here. If however you understand that buy to let is like any other investment and needs proper research here are our top ten rules for buy to let success:

 

1. Itʼs a business

Before you start a business you draw up a business plan. Investing in buy-to-let properties is a business not a hobby, so you need to ensure the plan includes a cashflow forecast, a description of your market and a breakdown of the areas you are looking at. In addition you need to set out a profit and loss forecast for a minimum of five years.

2. Know the local property market

Choose the right area to buy rental property

Successful buy-to-let properties are attractive to their particular market. For example families will want good schools in the area, family friendly amenities like parks and a sense of community.

Young professionals tend to prefer access to bars and restaurants and they like to be closer to the city centre, whereas being part of a local community is not as important.

If you don't know the property lettings market in Bristol then why not consider our Personal Shopper Service?

3. Know your area

Where does your target market like to live in Bristol? Once you know your target market, concentrate your search to areas where they live. There is no point in deciding on family properties and looking in Bristol's city centre, conversely a nice suburban semi in Henleaze or Westbury-on-Trym is not that attractive to young professionals as it's further out.

4. Factor in your costs

The costs involved in buying and running a buy-to-let property is not just about rental income and mortgage payments. You need to factor in your pre-purchase costs. These include stamp duty, legal fees, mortgage advisor fees, and surveyor fees. Then there are ongoing costs, building and contents insurance, block management fees, ground rent, ongoing maintenance and agents fees. These must all be factored into your business plan.

5. Preparation, preparation, preparation

Before you make an offer on a property make sure you are prepared. Have a solicitor ready (ideally one that knows the Bristol market), have a mortgage agreed in principal, and know what you are looking for.  We have a great relationship with several solicitors and mortgage advisors that can help you get ready.

In the current property market, estate agents are getting a lot of timewasters and can be quite particular to who they think might be “tyre kickers”. If you show you are serious and are prepared, they will contact you with new property that you can buy as an investment, before it is advertised to the general public.

6. Donʼt be swayed by smooth talking estate agents

Estate agents are sales people, they have targets and get commission on sales. They want you to buy a property through them, and sometimes this enthusiasm for a sale can lead to a little exaggeration when it comes to potential rental income.

If you see a property you think could be a good buy-to-let opportunity, get a second opinion on potential rent from a specialist letting agent, preferably one with 25 yearsʼ experience in the Bristol market, such as ourselves!

7. Do your research

Just because a property looks good in the daytime does not mean itʼs not party central after dark! What are the local schools like? How easy is it to get to the centre? Make sure that the area has the amenities to suit your market.

8. Donʼt be greedy

Empty properties donʼt earn you money but still incur you costs! It is better to have a good tenant at a lower rent than a bad tenant at a higher rent, or worse still no tenant at all in the hope of generating an extra £100 a month. If your property is not perceived good value, it will not get let out as quickly as you would want.

9. Do not fall in love with a rental property

As we said before, investing in buy-to-let is a business. Our most successful buy-to-let landlords own properties they wouldnʼt dream of living in. They realise this is a business asset and have no emotional attachment to the property. You do not have to like your property to successfully let it to a tenant.

10. It must satisfy Peter Ellisʼ 4 key questions of buy-to-let:


These are:

  • How much rent will the property achieve?

You need enough rental income to cover your costs, even if the property is empty for a period of time.

  • Will I get over 90% occupancy?

You should expect a minimum of 48 weeks a year occupancy.

  • Will I see capital growth?

Looking back over a 5-10 year period, the property should have increased in value.

  • Does it have "bailout-ability"?

All things being equal, if you need to sell the property, it shouldn't fail to sell quickly

If your potential buy-to-let property has positive answers to Peter's 4 “Key Questions” then this could be a rental property worth investing in.

The Next Step?

Why not try the Accommodation Unlimited ʻBuy-To-Let Personal Shopper Serviceʼ and let us help you find a buy-to-let that fits your market and your budget, and if Accommodation Unlimited manage your property, weʼll provide our property shopper service free of charge!

Visit www.aul.org.uk/personal-shopper for more details.