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Posts Tagged: Buy-to-Let Mortgage

How Do You Raise The Funds To Purchase A Buy-to-Let Property?

If you are considering becoming a landlord and wish to purchase a property that you will then let out you will require a considerable sum of money to buy it plus you may also need several thousand pounds to renovate and furnish it. So, where does the money come from to do all these things? Well, the cheapest option is to use any savings that you have accumulated to do all the above. However, not many people have the sort of funds necessary and, in any event, if they did, they may not wish to utilize all their savings for these purposes, so what is the next best option? You will need to borrow some of the money. We say ”some of the money” because, unless it is the likes of a family member agreeing to lend you all the funds you require, a commercial lender will only lend a certain percentage of the purchase price. The most popular way to borrow funds to purchase such a property is by way of a buy-to-let mortgage offered by the likes of the major high street banks and building societies as well as some specialist financial institutions. You will find that many…

Are You Trading Profitably?

When you purchase an investment property to let out, presumably you are doing so to make money. If you have bought the property with the assistance of a capital and interest buy-to-let mortgage you will, at very least, be looking for the rental monies to cover the mortgage repayments and any other related expenses. If you have bought an investment property outright from savings you will be looking for the rental income to provide a greater return than you were getting in your savings account and also cover the expenses involved in renting out a property. It is interesting to hear that, according to the National Landlords Association (NLA), there are 27% of landlords who own and rent out a single investment property who are either trading at a loss or are breaking even. Furthermore, 19% of landlords who own between two to four investment properties that they rent out are either loosing money or are just breaking even. These statistics are concerning and, in some cases, it begs the question as to how much research and planning some landlords have carried out when assessing the viability of a particular property as to its suitability for renting out. It would…

What Sort Of Property Should You Buy To Let Out?

If you are considering purchasing an investment property with a view to letting it out you need to decide what sort of property to buy. As a landlord, your decision will be based upon a number of factors so let us have a look at some of them. Budget Obviously, the amount you have available to spend on a property potentially made up of savings and buy-to-let mortgage will have a huge bearing on your decision. You will also need to build into your costings any improvements/alterations the property may need as well as the possible purchase of furnishings. % Investment Yield In theory, the higher the value of the property, the greater the rental income but the important factor is the % investment yield. For instance, does a property valued at £200,000 provide a lower or greater % investment yield than one valued at £400,000? If it is significantly greater then is it better to buy two properties at £200,000 each as opposed to one at £400,000? You may wish to seek some professional advice in that respect. Detached, semi-detached, terraced or apartment? This decision will, in many ways, depend upon not only your budget but also the type…

How Easy Is It To Get A Buy-to-Let Mortgage?

If you are considering getting into the buy-to-let market for the first time as a landlord you will certainly need a significant sum of money to complete the purchase of the property you want to rent out. You will also need to pay for any works that may be required such as installing a new bathroom, fitted kitchen, redecorating and furnishing the rooms. So, where is the money going to come from to buy the property? If you have liquid cash readily available then that is certainly cheaper than having to borrow the money but if not you may need to approach a bank or building society for a buy-to-let mortgage. If you are in that situation, how easy is it to obtain a buy-to-let mortgage and what are some of the criteria? Well, there are several major banks and building societies that offer such mortgages so it shouldn’t prove a burden in being able to source a lender. The difficult part can be in meeting the lender’s criteria that tend to be different to that of mortgages to purchase owner occupied properties. For instance, how much you can borrow tends to be connected to your projected rental income in…

Is It Worth Insuring Your Buy To Let Property?

This is an interesting question and worth spending some time answering. As with most things in life, there is no straight answer! If you have bought a property outright with your own funds with a view to renting it out you are under no legal obligation to insure it or the contents that you own in it for that matter. However, if you took out a buy-to-let mortgage on the property then the lender may have made it a condition of the advance that you arrange suitable landlords insurance. There is no question that the amount you have paid for the property will be a significant sum of money. In view of that, surely you would wish to protect your investment to make sure that should something untoward happen to it there is adequate insurance cover in place that would pay out to put right any damage to the property or your contents. Even if you were particularly wealthy and could afford to carry out any repairs caused by the likes of fire or flood by using your savings isn’t it worth just taking out a landlord insurance policy that may only cost a few hundred pounds a year in…

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