Buy to Let Tips in 500 Words by LettingFocus.com
Someone asked me what my five very top tips for success in buy to let are and would I mind summarizing the main things to do / not do in fewer than 500 words. So here goes….
One – Always buy in the right area and the right type of property at a good (i.e. low) price and buy where tenant demand REALLY exists. And check tenant demand exists BEFORE you buy. In most places you should avoid new build flats as they seldom keep their value, especially the developments where most flats have been bought by other landlords and / or are on huge estates full of the same kind of identikit flats and / or where the arrangements to manage the land around the property and the structure are weak. Look out for and buy into areas that are REALLY getting regeneration money, new employment or better transport. Preferably, all three.
Two – Avoid all Get Rich Quick in Property exhortations and / or anyone who uses phrases like “financial freedom” or “no money down.” Be very wary of the types of lease options scheme where the tenant-cum buyer buys a lease from you to purchase a property from you in the future. We think they are at best unethical and we don’t think they will stand up to legal scrutiny in the future either. We also expect them to be banned just as soon as the FSA wakes up to them – which given their usual speed won’t be for another three to five years at best.
The fact is you can get rich in property but it is not something you can do fast and if you cannot afford to invest without resorting to weird and strange financing / cash flow techniques then think hard about if you should not be in the property investing / landlord game at all.
Three – Don’t simply trust to a letting agent to do thorough reference checks on tenants for you. YOU need to make sure they have done the proper checks. If you skip this advice you will eventually get a tenant from hell. Trust me on this!
So, make clear to the agent what tenants you want and don’t want and ask to see all references and retain a veto if they aren’t good enough. Don’t pay over one months rent to an agent to find a tenant for you and NEVER pay renewal charges if all the agent does is find a tenant for you. Even better, find a tenant yourself for about £50. See our Services and Products for Landlords page.
Four – Be nice to tenants. Fix things fast, be available during working hours (within reason) and don’t be mean and sweat small pennies. Offer competitive rents to good tenants – i.e. one that’s a bit below the market average. Never forget, good tenants are worth getting and keeping! If you operate in “specialty sectors” like HMOS, students or “Benefit Tenants” you’ll need to do extra swotting up and make sure you know what you should be doing, stay within the law and get paid.
Five – As a landlord you have legal responsibilities – sorry but the days of Rigbsyesque “muddling through” are long gone. So, understand the law or risk getting fined. Have a good filing system and keep a sense of humour!
It being the end of the tax year, I see the personal cheap viagra super finance press was full of ISA stories at the weekend. But the best rate you can get on money tucked away for a year is actually from the National Savings and Investments (that’s the government) whose Index linked certificates are paying 1% above the RPI inflation rate. That means they are currently paying 4.7% and it is tax free. I have not seen a one year term ISA or a non ISA rate that beats that.
Too bad pretty well all the journalists that wrote about ISAs were copying from press releases from bank and building societies and were just too lazy to check out the NS&I rates.
MORE ABOUT LETTINGFOCUS AND WHAT WE DO
LettingFocus.com is the home of Landlord Information.
I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years.
Services to Businesses and the Public Sector
Primarily I am a consultant to banks, local authorities, social housing providers, insurers and other organisations – helping them with their landlord facing or buy to let product strategies and services.
For example, I help banks improve their buy to let mortgage lending practices and I help housing association / local authorities find private landlords (private rented access schemes, local letting agency models etc.)
I also write for property websites and am regularly quoted by the media.
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We also find some spare time to help landlords and property investors by coaching them in how to make money in the private rented sector using ways that work, which are ethical, fair to tenants and which involve minimal risk to the investor.
We pride ourselves on giving independent unbiased Buy to Let Advice on a one-to-one mentoring / coaching basis or through our occasional group seminars.
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