When buying a property to let privately

What to watch out for

Value If you consider renovating the property and in the long run selling, then you should make sure it would increase value with time. A good strategy is to compare prices for similar properties in the area you want to invest. Find out how much it would cost to renovate in to make your home as competitive. Add all the costs related to the current price you are paying and compare the sum with the anticipated appreciation of the property for a selected period (i.e. ten to fifteen years). Your mortgage lender or the ARLA can help you get the estimate. If the appreciation surpasses the acquisition costs, providing good profit, you should consider buying.

• Seek properties that have the best appreciation; these are usually located near good transportation, shopping and schools. 
  
• Focus in places where the number of rentals is low compared to the number of owned houses.
  
• When you find a property, inspect it thoroughly to make sure any outstanding maintenance problems are only superficial.
Insurance
Your Mortgage lender will probably try and entice you to take out buildings insurance, content and life insurance with an insurance company with which they are affiliated. This may be most convenient as such insurance might be added to the mortgage payment so you don’t have to pay it off immediately. However shopping around a bit could find you a better deal. The independent body the financial Services Authority can advise you on insurance. 
Your Mortgage lender will probably try and entice you to take out buildings insurance, content and life insurance with an insurance company with which they are affiliated. This may be most convenient as such insurance might be added to the mortgage payment so you don’t have to pay it off immediately. However shopping around a bit could find you a better deal. The independent body the financial Services Authority can advise you on insurance. 
What to watch out for:

Rental overload in the area can force your rent down. You might end up paying off the mortgage yourself.

Make sure you thoroughly research your management company. Lazy landlords might cause your property to decrease in value for lousy maintenance.

Making your property more competitive by investing in renovation should be carefully evaluated; recoup of investment might be difficult.