Copyright 2006 Vincent Wilmot
Being a landlord may be a very sound investment especially with rising property values - yet property investment can be risky and lenders will give you a loan for a bad scheme. The wise Buy To Let investor, before buying property or getting mortgages on any Buy To Let idea, gets expert financial advice - often using a good property investment calculator and often low cost.
The two main property investment choices.
There are two main choices in property investment, buy a house to let when the maximum UK mortgage will be at most 85% of valuation, or let your own house and buy yourself a new house when you may get 100%. But certainly, before you buy a property to let or decide to rent your own house and buy a replacement for yourself in England, you should get an expert estimate of your likely profit or likely loss, and also get an estimate of how big a rent and mortgage loan you should be able to get ! Even if your Buy to Let idea is at an early stage, with no actual property in mind yet, you should be able to get good advice on your approximate estimated ballpark figures.
Buy To Let Mortgages.
Before you make an offer or bid for a property, you may want to apply for a mortgage - lenders will often not need to know what property you want to buy but may want to know what rent you hope to get. For your Buy To Let property purchase a 10% cheque will normally do for a deposit, but you will get at most an 85% mortgage so you will usually need another 5% at completion. However, you may find some sellers prepared to cover that 5%. If you want speed, you can get a surveyor to go with you when you view a property - but if you need a mortgage then the lender may want their own survey done after also. But be warned that many selling good Buy To Let mortgages will give you dangerously poor advice on the wisdom of your property purchase - for that you really need independent advice !
Letting property that you already own.
If you are thinking of renting out property that you already own, or if you are now letting property, then it may be wise to get an expert report on how good a financial property investment it is. You are investing the value of your property, and you should be sure that it is making reasonable profit. Your current property value estimates, and current mortgage loan amounts will allow an expert appraisal including rent level advice and taxation advice.
Do be the wise investor.
If you are wise then do not consider buying property to rent out, until you get an expert estimate of your likely profit, or likely loss, and expert advice !Major UK lenders like the big banks have said that they think all investors thinking of buying property to rent, should get an expert financial appraisal before seeking a Buy to Let investment mortgage - as does the Council of Mortgage Lenders guide "Buying to Let". Many lenders will not calculate your Buy to Let mortgage on your income, property price or value, but on your expected rent as do good mortgage calculators. Some lenders may use your income, or part rent and part income, but lenders can give you a Buy to Let mortgage on a project likely to make a loss and which you cannot afford, and letting agencies can land you with a rent level that is too high or too low, so you do really need expert investment advice first - and with luck that need cost little !
About the author:
Vincent Wilmot currently lives in Grimsby UK and has several interesting websites including http://www.buy-to-let.me.uk
