Copyright 2006 Vincent Wilmot
Being a landlord may be a very sound investment especially with
rising property values - yet property investment can be risky
and lenders will give you a loan for a bad scheme. The wise Buy
To Let investor, before buying property or getting mortgages on
any Buy To Let idea, gets expert financial advice - often using
a good property investment calculator and often low cost.
The two main property investment choices.
There are two main choices in property investment, buy a house
to let when the maximum UK mortgage will be at most 85% of
valuation, or let your own house and buy yourself a new house
when you may get 100%. But certainly, before you buy a property
to let or decide to rent your own house and buy a replacement
for yourself in England, you should get an expert estimate of
your likely profit or likely loss, and also get an estimate of
how big a rent and mortgage loan you should be able to get !
Even if your Buy to Let idea is at an early stage, with no
actual property in mind yet, you should be able to get good
advice on your approximate estimated ballpark figures.
Buy To Let Mortgages.
Before you make an offer or bid for a property, you may want to
apply for a mortgage - lenders will often not need to know what
property you want to buy but may want to know what rent you hope
to get. For your Buy To Let property purchase a 10% cheque will
normally do for a deposit, but you will get at most an 85%
mortgage so you will usually need another 5% at completion.
However, you may find some sellers prepared to cover that 5%. If
you want speed, you can get a surveyor to go with you when you
view a property - but if you need a mortgage then the lender may
want their own survey done after also. But be warned that many
selling good Buy To Let mortgages will give you dangerously poor
advice on the wisdom of your property purchase - for that you
really need independent advice !
Letting property that you already own.
If you are thinking of renting out property that you already
own, or if you are now letting property, then it may be wise to
get an expert report on how good a financial property investment
it is. You are investing the value of your property, and you
should be sure that it is making reasonable profit. Your current
property value estimates, and current mortgage loan amounts will
allow an expert appraisal including rent level advice and
taxation advice.
Do be the wise investor.
If you are wise then do not consider buying property to rent
out, until you get an expert estimate of your likely profit, or
likely loss, and expert advice !Major UK lenders like the big
banks have said that they think all investors thinking of buying
property to rent, should get an expert financial appraisal
before seeking a Buy to Let investment mortgage - as does the
Council of Mortgage Lenders guide "Buying to Let". Many lenders
will not calculate your Buy to Let mortgage on your income,
property price or value, but on your expected rent as do good
mortgage calculators. Some lenders may use your income, or part
rent and part income, but lenders can give you a Buy to Let
mortgage on a project likely to make a loss and which you cannot
afford, and letting agencies can land you with a rent level that
is too high or too low, so you do really need expert investment
advice first - and with luck that need cost little !
About the author:
Vincent Wilmot currently lives in Grimsby UK and has several
interesting websites including
http://www.buy-to-let.me.uk
