The basic idea of Buy to Let is that by purchasing a piece of property by means of a mortgage and renting it, you will make a profit in the long term. You will have to familiarise yourself with the property market in the area where you are hoping to invest. You can do this research yourself or hire an agent to do it for you.

After finding the right property, you will want to determine how much capital you will provide and how much you will be borrowing as a mortgage on the property. Remember that you will need to find funding for maintenance costs and also provide for periods when the rented property may be unoccupied. You should always seek professional financial advice as to which mortgage is best for you.

Property Maintenance

Under a Buy to Let mortgage, you become the landlord of the property, so you will have to contend with a number of responsibilities. Before the property can be rented, you will have to make sure it is in good condition and fit for occupation by attending to any maintenance or renovation work that may be warranted. It is important to bear in mind that a Buy to Let investment is usually a long term proposition and your money will be tied up for a long time.

What Else?

As a landlord, it will be your responsibility to collect rent from your tenants and attend to their complaints. You will have to ensure that gas and electrical connections meet safety requirements. You will also have to conform to fire safety regulations.

There are also legal responsibilities of which you should be aware. As a landlord, familiarise yourself with laws regarding tenant rights and tax issues, as Buy to Let investments are subject to specific taxes.

Also be realistic regards your ability to deal with tenants. You will be dealing with members of the general public. Do you feel comfortable doing this? Have you experience in handling complaints? Are you able to deal with some level of uncertainty and confrontation? Most tenancies proceed fairly smoothly, assuming that prospective tenants are suitably vetted but there are those occasions where tenants default on rent payments or create material damage to the property. You need to be ready for this. If you find contention difficult, you may wish to employ a managing agent to look after your affairs, usually at a cost of around 10-15% of the rental income.

Conclusion

A Buy to Let property is not the equivalent of owning a home: it is more like running a business and should be treated as such. You can hire a managing agent to look after your property for you, which will cost about 15% of your monthly rental income, or you may prefer to manage the properties yourself. Either way, by familiarising yourself with the Buy to Let market, making sure that your own financial standing will support the protracted investment time required and choosing a property wisely, you stand to potentially reap good rewards from this investment over the years.