Buy To Let Top Tips
Edinburgh’s buy to let market is currently gaining momentum, with statistics suggesting this sector of the property industry is enjoying a recovery from the recent downward turn. Buy to let mortgages are at their highest rate since 2008 and the number of lenders has increased significantly from last year. This growth indicates that more people are recognising the advantages of buying a property with the view to let: not only does it give you a regular income from rental payments, but it also offers the opportunity to establish a valuable assetfor the future.
However, as with all financial ventures, careful planning is needed to ensure your investment proves fruitful. So if you are considering a buy to let in or around Edinburgh, follow these 5 top tips to make your buy to let a success:-
Type of Tenant
The first thing you need to decide upon is what type of tenant you wish to occupy your property. Edinburgh has a broad demographic: it is characterised as a university city, and also has a wealth of young professionals and families looking for a home to rent. The type of tenant you wish to occupy your property will, in all likelihood, help to determine where you buy.
You need to research different areas of the city keeping your target audience in mind. So if you wish to appeal to families, begin by exploring locations that would be attractive to a family set-up – for example, a residential area with good local schools and transport links.
You may also want to explore parts of the city which are demonstrating a strong performance, such as the New Town and West End. Buying in an up-and-coming area will prove a prudent move in the future, as you can take advantage of any capital growth and make a notable profit when you decide to sell.
You may need to carry out maintenance work to your property before you can rent it out. If an extensive amount of renovation work is necessary then this could restrict the amount you are able to borrow, so it is essential to factor it in to your budget.
Plan how much you’re going to receive every month from rent. Begin by investigating how much other landlords in the surrounding area charge as a comparison, allowing you to plan your mortgage payments. However, be sure to make future projections for the months the property is not occupied – known as ‘void periods’. Otherwise you could come unstuck financially.
Alternatively, you may want to explore Edinburgh’s Private Sector Leasing scheme. Established in 2005, the scheme gives the Council the opportunity to lease properties from private landlords before subletting them to those in need of housing.
When you start to rent your property, you automatically have certain legal obligations to adhere to as a landlord. These include complying with health and safety measures and observing a tenant’s right to privacy. It is vital you know these responsibilities, or you could face legal action.