Buying to let property is a whole different process compared to buying a residential property. If I’m not keen, I will end up with losses and have legal issues. Here are some top tips that will ensure I avoid these two situations altogether.
Since I’ll spend a lot of money buying the property, it is best to research it. As a landlord, I should keep in mind that I need to be responsible for other things apart from rent collection. These might include:
- Ensuring the property stays in the right habitable conditions
- Carrying out annual safety checks
- Knowing the rules concerning the deposits from my tenants
- Understanding the process involved when recovering rent or evicting rent-defaulting tenants
To help me navigate through all these, I will need expert advice. Talking to an accountant, a lawyer, and a property surveyor will offer better insight into all the complexities involved.
Before I go out looking for a property, I should take time to set a budget. Remember that property to let will involve more than residential property, so I should keep this in mind. I’ll need to get my finances in order and find out if I can qualify for a loan. There is nothing as wrong as going ahead to get a property, only to let it go because I cannot afford it.
One way to ensure I can secure a property loan is by having a good credit score. Banks and lenders look at these when considering a borrower for property loans. I should also ensure I have a practical plan to pay the loan, and other income sources will help in this case.
If I’m getting a property to let, I’ll need to know the returns. To do this, I divide the potential earnings per year on the property by the property’s cost and get its percentage. I should also consider the cost of running the place and whether it will be worth my time and money. If I find that the returns are too low, I might want to consider other property options.
When I finally get a workable property, I need to find out more about it. Blindly buying property without carrying out background checks on it is never a good idea. Some of the things I should look into include:
- Who owns the property?
- Have there been any legal issues with the property
- What other things come with the property (items like furnishings)
- Is the property currently rented out to tenants? I should get details of the tenancy and when they expect their contracts to expire. Finding out if the tenants have already paid in advance is also vital.
Such issues might affect my plans for the property, so ensuring I get accurate details on them should be a priority.
When I check out all property details, I can now proceed to negotiate a deal. Agreeing with the initial price the seller offers isn’t always the best move. I might have to take some time to haggle over it, and in most cases, the seller will reduce the price. Doing this will ensure I get the best price for the property.
While it might seem like a simple task, buying property to let can be complicated. As such, I need to take the time to research before fully getting into it. It will save me a lot of issues down the road.