Once you have made the decision to invest in a residential Buy to Let property, it’s worth sticking to a few basic rules. This is likely to make the whole process simpler and easier to manage further down the line. They are;
To some extent this might be governed by your cheque book, but have in mind what you are looking for and why. Most private landlords will agree that flats are more management-intensive than houses, but in some areas the young urban professional is attracted to the benefits that come with residing in a centrally located, well appointed apartment in a city centre. On the flipside, houses usually have gardens - which need to be tended!
If you are considering multiple occupancy then a larger house in need some work might be ideal if you have reasonable DIY skills and a knowledge of the law relating to multiple occupancy dwellings. University towns are worth considering if you are looking at converting a large property for multiple occupancy for obvious reasons.
Remember that flats are more susceptible to neighbourhood disputes and noise complaints and because they are, by necessity, leasehold properties, you have your own landlord’s rules to abide by, as well as a service charge and ground rent to pay.
It’s almost always better to stay local. Invest in an area you know well and that you like. If possible, buy in an area you wouldn’t mind living in yourself. After all, a cheap property is usually cheap for a reason! The better the location the better your chances of a reliable income and long term capital growth - with one exception (see (4.) below).
Try and buy in local in Maidenhead. There is nothing more soul-destroying than a 90 minute trip up a snow-covered motorway at 8pm on a Wednesday night to deal with a broken boiler! Even if you intend to employ a managing agent, it’s well worth considering local investment. Owning property nearby is a much easier proposition to manage.
If you know an area well and there are good reasons to expect that the area is improving then investment in that area is well worth considering. Sometimes the construction of a new railway station or improvement of the road network will make the case for you. Sometimes it is more of a cultural thing. In the past many investors have followed ‘the pink pound’ with great success, buying in low cost urban areas that are becoming popular with vibrant metropolitan communities usually made up in large part by artists, artisans and the affluent metropolitan gay community.
Remember, your investment is only an investment if it provides a return! If your property is empty for long periods of time then it can quickly become a crippling burden on your monthly cash flow. Also, buy the type of property most in demand in the area you have chosen. There is little sense in buying a small one bedroom flat in a primarily family-oriented suburban area with good schools, unless you plan to target the recently divorced of course!
All property costs money to buy, sell and own. There may be a significant stamp duty charge for you to pay on purchase these days and remember it is higher for buy-to-let than for owner occupiers. There’s also insurance, statutory checks of gas and electricity and other utilities and the upkeep of the property’s fabric and internal fixtures and fittings such as smoke alarms and cookers.
Remember to allow for void periods when the property is empty and keep a cash float to cover void periods, letting agent’s fees and general maintenance.
Unless you are confident that you can add extra value by refurbishing older property for let, or the return on investment is higher for character properties in that area, then buying modern property that is well insulated, built to modern standards and in less need of regular repair and costly maintenance is likely to save you an awful lot of time.
As with any business proposition, make sure you undertake a full cash flow analysis before you commit.
This should include all capital costs and ongoing expenses and allow for regular inspections, maintenance, professional fees, void periods and tax liabilities. Allow for the additional ‘hassle factor’ that comes with owning property and make sure that the return you are getting (both rental and capital) is worth the risk.
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
5 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
12 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
15 days ago
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
21 days ago
Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.