What to Look for Before Purchasing a BTL Property
BTL, or Buy-to-Let, properties are rapidly becoming some of the most popular solutions for landlords keen to expand their property portfolio, while enjoying a consistent influx of cash. There are specific types of BTL mortgages available, under the condition that the home will be used solely for rental purposes. For landlords and investors looking to purchase a BTL property, we’ve compiled this quick guide on things to consider.
Check for asbestos
One of the first things to do when looking at a BTL property is to check for asbestos. This harmful material doesn’t have to be deal-breaking, but it is good to know if the property features an asbestos insulation boardor two. Although more common in older properties, it can be present in certain newer builds too - and hiring a specialist to check for the presence of asbestos can make all the difference.
Consider the location
The location of your BTL property will likely dictate how much income you’ll receive from rent. The closer to a town and amenities, the more likely the property will be to be rented, but that doesn’t mean that more remote options are out of the question. In fact, many people look to quiet regions for getaways and vacations, so this is why it’s worth thinking about the location of the property before looking to purchase.
Think about your ROI
As an investor, you’ll undoubtedly want to maximise your return on investment as quickly as possible. As a result, it can make much more sense to invest in smaller properties that will yield a consistent influx of cash per month, than one singular large home that you struggle to rent. Your ROI will likely be much higher when buying an apartment for rental purposes near a college or university campus with constant use, than if you were to invest in a home near a lake that is only rented a couple of times a year.
Don’t be roped into competing
Plenty of properties for sale will have interested buyers and when this happens, you might find yourself entering into some sort of bidding war. Rather than getting roped in, take your time and consider your options. Get to know the market, speak to a few estate agents and bide your time until the right property comes up. To secure it, consider placing a deposit that will negate any competitors from stealing your BTL home, and then proceed from there.
What to do next
Once you’ve taken care of the finer details above, you’ll likely find yourself in a much better position to invest in your next BTL, whether you’re paying in cash or going for a mortgage. Always consider your budget and what you can expect to make back as profit, with industry experts advising potential buyers to go for properties that will act as consistent accommodation, as opposed to those that may rarely be used. On the other hand, investing in a more luxurious property might not provide year-round rental potential, but you could charge much more during particular seasons, surpassing yearly rental costs from smaller apartments and flats.
