When one has the capital to make a significant investment, the thought of buying a property to let surely comes to mind. Letting out a property can be a fine source of capital growth, however it also requires much work on the part of the landlord. If it is your intention to purchase a property to let, it is important to know a few of the pitfalls along the way and how to avoid them.
The first thing you must know is for what purpose you are buying the property. Your objectives might be income, which is your month to month profits from the tenants, or capital growth, which deals with making a profit through increased equity from the second property as the value increases over time. This choice should influence what type of property you purchase and the location of the property.
Maintaining a property is an expensive process. As a guide, you should be aiming to achieve a gross rent of at least one hundred thirty-five percent of the propertys interest only mortgage repayments. This will help you cover your costs should anything go wrong with the property.
There are three great differences with buy to let mortgages that you should know about. Firstly is...
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