Buy To Let
As property investment is for the long term, there is still plenty of opportunity to benefit, despite recent reports to the contrary. It is simply a matter of being a bit smarter and a bit more patient.
Before jumping in feet first, consider whether you’re in the right position to become a landlord. Can you afford to tie up money in property? If the worst comes to the worst, can you afford to lose some of that money? It is important to remember that this is a long term investment and the same levels of consideration that you would give to other investments (stocks, shares etc.) need to be given to putting money into property.
When you start your search, you need to know what you can afford to spend, and what the rental return is likely to be. The CPS Homes lettings department work closely alongside the sales team and can provide accurate, up-to-date information about the rental market, provide comparables and what particular types of properties are in demand at the moment.
After you have successfully bought your house, our lettings team will be pleased to manage it for you. We can find tenants, organise references, chase up overdue rent and handle maintenance issues for you. For more information, please see our Landlords page.
Unlike other forms of investment, it is likely that most of the money you invest in a buy-to-let property will be borrowed. Because of the huge increase in buying to let over recent years, borrowing money to invest in this way has become easier than ever. Lenders will now even consider offering buy-to-let mortgages to first time buyers!
You also need to consider capital gains tax. When you sell a property that is not your main residence, you will have to pay tax on any profits – usually 40%. It is possible to apply to have the investment property considered as your main residence, but you have to do this at least 12 months before you sell.
As well as thinking about mortgages, rents and tax, it is wise to seek specialist advice on insurance. Standard household insurance only allows the property to be empty for a maximum of 30 days at a time. If you have problems finding tenants, you may be in a situation whereby your property is empty for longer.
Please see below for some useful dos and don’ts to becoming a landlord.
Do Think of buying to let as a medium to long term investment
Do Talk to CPS Homes’ lettings department about local market demands
Do Think carefully about your finances – will the rent cover borrowings and costs, including any void periods?
Do Decorate, fit out and furnish to a high quality – especially kitchens and bathrooms – to attract the best tenants and let quickly every time
Do Use CPS Homes as you managing agent. We can offer the best possible services for both landlords and tenants alike.
Don’t Get personally involved. You are not buying the house for yourself to live in, and it doesn’t have to be to your taste. Make sure the property you choose meets market requirements.
Don’t Buy a property with potential maintenance problems like a lot of woodwork or large gardens. It will not add to the rental value and costs a lot to maintain.
Don’t Think that you can go away and leave the running of your property to friends or family. Tenants need a full time management service.
Don’t Use off-the-shelf tenancy agreements, forget to issue the right notices or fail to complete a proper inventory (statement of condition) report drawn up before your tenants move in. Leave this to us!
Don’t Be tempted to use second hand furniture or used soft furnishings. These may contravene furnishing regulations.