Are you thinking about investing in a buy-to-let property? This can be a smart investment choice but you need to make sure that you are approaching it the right way. Here are the options that we recommend you consider here and the pitfalls that you must avoid.
First, you need to think about your credit rating. When you invest in a buy-to-let property, more often than not, you will need to take out a loan. This will be the case, unless you have a sizable amount in savings. To qualify for this type of investment loan, your credit rating needs to be beyond reproach. If you have a poor credit rating, you might be able to still access a loan. But the terms won’t provide the benefits that you need in the long or short term.
Finding The Right Tenants
Once you invest in a property, you need to make sure that you are finding the right people to live there. It’s important that you don’t discriminate when choosing tenants. However, at the same time, you need to find people that you can trust and who are going to live by your rules while looking after the property. If this isn’t the case, then it’s going to make this investment far more stressful than it needs to be. You might want to hire a property management team to avoid this issue completely with your new investment venture.
Health And Safety Challenges
You have a lot of responsibilities when you own a buy-to-let property. Don’t forget, you’re essentially going to be taking on all the different responsibilities of a landlord. This means that you need to make sure that you don’t get caught in the trap of failing when it comes to health and safety. You need to complete the right checks to keep the property up to the key standards overall. For instance, if you already own a buy-to-let property and you haven’t done so already, you should arrange an EICR today to ensure that there are no technical issues with the wiring that could lead to a disaster in the long term.
Finally, you need to make sure that you are prepared for the unexpected bills that you can face when you invest in a buy-to-let property. These can be considerable, eating into your overall budget and impacting your ability to make a profit with rent payments. To deal with any unexpected bills, you need to make sure that you think about having a cushion of cash and a safety net you can fall back on. You should also aim to diversify your investment portfolio to ensure that you have other funds that you can use for your property investment.
We hope this helps you understand some of the key steps that you should take when you are investing in a buy-let-property and the challenges you can face. If you are prepared for these issues, then you will be able to put the right pre-emptive measures in place from day one.
Image Credits: Jessica Bryant