When buying a property to let privately

What is important to check?

Mortgage
There are now a range of different types of mortgages available for properties which are bought to let. You can choose from fixed rate to discount and capped rates. Most lenders will not let you borrow more than eighty per cent of the property price and will stipulate that the monthly rental income is at least worth 130 per cent of the monthly mortgage repayments
Costs
In addition to the fees and charges associated with purchasing a property there will be additional costs factoring such as solicitors’ fees, estate agents’ fees, insurance, mortgage arrangement fees, Stamp duty and ground rent. Make sure you know exactly how much each of these fees will be before signing contracts. When these fees have been paid, there will be ongoing costs to budget for. These include the cost of repairing broken fixtures such as washing machines, complying with regulations like health and safety which can incur charges like putting in fire doors and smoke detectors.
Investment
There is an increasing amount of homebuyers who consider buying-to-let as a profitable long term investment. This trend is creating stiff competition for tenants and properties. However, profit usually cannot be realised before five to ten years. As a long-term landlord you might suffer if the rental market slows down. This means you might end up paying off the monthly mortgage you were hoping your tenants would respond for.