Since the Buy-to-Let property investments are beginning to look very promising, more and more people are moving to invest in a second property, which works out to be a long-term investment plan for them.
However, there is no doubt that with the obvious benefits, there are pitfalls as well. So here is a list of tips that can help you circumvent these pitfalls:
Tip #1: Picking the right property
No matter what you do, you should remember that the location of the property is vital. By checking in with a host of letting agents, you can easily determine the levels of supply and demand in the area. In addition, find out whether there are local employers or a university in the area.
Tip #2: Choosing the right mortgage
Check with your lender how much you can borrow. No matter how much you do borrow from them, you should ensure that the monthly rent that you receive should be at the value of 125% of the monthly payments.
Tip #3: Calculating costs and income
It is important to work out costs and income that you will make from rent once you buy and let out the property. For this, a bit of research is imperative to check whether or not the rent in the area will exceed the mortgage payment every month.
Tip #4: Getting the right insurance
Since you will be the owner of the building, you will have to make sure that you have the right kind of insurance as most building insurance policies do not cover buy-to-let properties.