Landlords Essential Guide to Letting

Jigsaw Letting Selby

1. Research the market

If you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits? We can offer advice and guidance on the lettings process and with our 20 years of experience will ensure the process is made as simple as possible for you.

Alternatively, we can put you in touch with some of our landlords with properties in your area. We can also offer advice on properties to buy in which areas with approximate rental yields.

2. Choose a promising area - Location, Location, Location

This does not mean most expensive or cheapest. Promising means a place where people would like to live and this can be for a variety of reasons.

Location is paramount if you are an investor and would you ever need to sell urgently you need to be able to do this with minimum losses. Our best advice is to buy the worst house in the best area as opposed to the best house in the worst area.

We can give advice on where in town has a special appeal? Where has good transport? Where are the good schools for young families? What are the sought after areas and types of property?

Familiarising yourself with these areas might sound over simplistic, but they are probably the most important aspect of a successful buy-to-let investment.

3. Do the maths

Before you think about looking around properties sit down with a pen and paper and write down the cost of houses you are looking at and the rent you are likely to achieve. We can offer plenty of advice in terms of potential rental income and if you would like to take the opportunity of this then you can email info@jigsawletting.co.uk for the attention of Sharon any property you are considering buying for an online approximate rental valuation.

New buy-to-let mortgage deals still remain more expensive than residential deals and require a bigger deposit but property prices having fallen to more affordable levels of late.

If you are willing to accept that the value of your investment property may slide in the short term, and can ensure your property meets the criteria of agreed loan-to-value then it can be a good long-term investment.

4. Shop around and get the best mortgage

If you are looking for advice consider using an independent buy-to-let mortgage advisor. Remember asking them for information means you are under no obligation to use them.

5. Think about your target tenant

Instead of imagining whether you would like to live in your investment property, put yourself in the shoes of your target tenant.

Who are they and what do they want? Does it need to be easy to clean and comfortable but not luxurious? If they are young professionals it should be modern and stylish but not overbearing? Is it a family so will they have plenty of their own belongings and need a blank canvas?

We can give good indications from the areas you are looking at and what would be your target tenant and we have a database of tenants waiting for good quality properties coming onto the market.

Remember that allowing tenants to make their mark on a property, such as painting, or adding pictures or taking out unwanted furniture makes it feel more like home - these tenants will stay for longer, which is great news for you as a landlord. As your managing agent we always ensure that if they did want to decorate then permission would be applied for in writing and colour schemes can be agreed if necessary.

6. Don't be over ambitious - go for a realistic rental yield and remember costs

Many buy-to-let mortgage lenders will only lend up to 70% - 80% of the property value, so you'll need to put in some money yourself - which of course has a cost too!

Once you have deducted all these costs from the rent, you end up with your net expected rental income.

If you divide this into the value of the property, including all the costs associated with buying it, you have the 'true' or 'net rental yield'.

So, if net rental income is £10,000 and the property cost £200,000, the net rental yield is simply £10,000 divided by £200,000 which equals 0.05 or 5%.

Once you do the maths, you may find that the net rental yield figure is less than the cost of your mortgage, leaving you with a shortfall. However, if you have bought well, you should expect the rental income to creep up over time - plus you should see some capital growth too.

7. Consider doing a property up

It is worth looking at properties that need improvement as a way of boosting the value of your investment. Tired properties or those in need of renovation can be negotiated hard on to get at a better price and then spruced up to add value.

This is one way that it is still possible to see a solid and swift return on your capital invested. However, remember to ensure that the price is low enough to cover refurbishment and some profit and that you allow for the inevitable over-run on costs.

8. Haggle over price

As a buy-to-let investor you have the same advantage as a first-time buyer when it comes to negotiating a discount.

If you are not reliant on selling a property to buy another, then you are not part of a chain and represent less of a risk of a sale falling through. This can be a major asset when negotiating a discount, especially in a tough market such as the one we have now. Make low offers and do not get talked into overpaying.

We advise to have a cluster of properties that you are interested in and make low offers on all of them - it is like fishing - someone will bite!

9. Let us do the hard work for you

Before you make any investment you should always investigate the negative aspects as well as the positive which we can again advise you on. As an ARLA licensed registered SAFE agent we would minimise the risks by finding you a good tenant fulfilling referencing criteria who will look after your property.

Letting your property can be a complicated and time consuming process and we can simplify this for you, we will ensure that you receive the lettings service your investment deserves as we are dedicated staff solely dedicated to letting with no hidden costs.

10. Consider how hands-on you want to be

Buying a property is only the first step. Next steps are to decide how involved you would like us to be? Do you want us to fully manage the property or simply offer a tenant find service? Or do you just need internet presence on advertising? See our information on 'Our Key Services' on our Landlords page for more information on what we offer.

For further advice on any of the above and to book your free no obligation rental valuation talk to us on 01757 241123.