Before purchasing a property to let out, you need to take into account your finances. You need to consider the benefits and financial risks very carefully. Here are a few things you may wish to keep in mind:
- Buy-to-let mortgages allow property investors to acquire a mortgage to purchase a property to let out. Rental income then covers mortgage repayments.
- Achievable rent. Take into account and the amount you would need to charge to cover your mortgage and other outgoing costs.
- Demand for rented accommodation in the area which you are considering investing. For example, in many areas, including popular inner city locations, there may be an oversupply of rented accommodation and therefore it could be difficult to rent the property out.
- Profit margins
- Outgoing costs, including repairs and letting expenses as well as advertising and professional fees.
- How long you can afford to have the property vacant.
- Ability to pay your mortgage if the tenant stops paying rent or you have an unexpectedly large repair bill.
- The potential Return of Investment (ROI).
Click next to continue to read the RLA's guide on 'How to be a Landlord'. The following pages will include information on using agents and more common questions on how to be a landlord.