Following on from tips #7 and #8 on Buy-to-Let investing here are the last two in the series.
9. Know the pitfalls.
Before you make any investment you should always investigate the negative aspects as well as the positive. What will happen if the value of your house falls? What will happen if you can’t re-mortgage?
Even in popular areas properties can sit empty. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year – this gives a substantial buffer. Homes often need repairing and things can go wrong. If you do not have enough in the bank to cover a major repair to your property, such as a new boiler, do not invest yet.
10. Consider how hands-on you want to be.
Buying a property is only the first step. Will you rent it out yourself or get an agent to do so. Agents will charge you a management fee, but will deal with any problems and have a good network of plumbers, electricians and other workers if things go wrong.
You can make more money by renting the property out yourself but be prepared to give up weekends and evenings on viewings, advertising and repairs.
If you choose an agent you do not have to go for a High Street presence, many independent agents offer an excellent and personal service. Select a shortlist of agents big and small and ask them what they can offer you.
So there you have it. Hopefully this has given you a flavour of what Buy-to-Let investing is all about. We still actively buy properties just for our portfolio using these principles and in addition we are active in other areas of the property market and use other strategies. We will write about some of these in future articles.
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