Here are some tips to get the best out of buy to let mortgage deals as an investor in a buy to let.
1) Market Research
First be sure that you want to invest in buy to let mortgage deals, as there are better investment opportunities elsewhere. In these deals you will be locking you your capital in property whose value might fall. Proper market research and asking people who have done similar investments is a good idea.
2) Select the area carefully
Select areas where people are most likely to live irrespective of the cost. Find out if the area falls on a commuter belt or if there are good schools or the area caters to people of a certain age.
First find out how much a house is going to cost you and the possible rent which can be charged. Usually most people who invest in buy to let mortgage deals expect a rent which will be over the mortgage payments by 25%. It is also wise to get a deposit of up to 15 to 25% to create a buffer for falling prices.
4) Evaluate the possible requirements of prospective tenants
You must be sure that tenants would actually like to live in your property. Consider the possible target tenant and their requirements. Are they going to be students, family, old people and so on, and then plan accordingly and consider taking out insurance for rent guarantee as well.
5) Over ambition can lead to disaster
The days when house prices used to rise in double digits are far gone and therefore avoid big portfolios. For calculations, compare the possible yield from rent against the purchase price and get the yield percentage. This yield should cover the full monthly mortgage payment and not just the interest, and there should also be some extra which is your income or can be made into an emergency fund.
6) Consider areas which are far as well
Many people investing in buy to let mortgage deals will only be considering areas near their residence. The logic is to keep an eye on the property, but you could employ an agent to do that and consider more lucrative areas which may be far.