Any investment involves risk but some people are more suited to a hands off style of investing. Yes you can use a letting agent but you still have to get involved. For the uninitiated and can be overwhelming when things start to go wrong.
Property in some ares are very cheap. That’s not to say that people don’t want to live there. It could be that those who do can’t afford to buy there. Make sure you buy in area where there is a demand for rental properties. Can you walk to schools, shops, train stations….? Location Location Location.
Whats the right and whats wrong place? Well right now there is huge demand for family homes but very little for modern 2 bedroom flats outwith city centers. That’s because in the building boom years developers where making more money building flats than houses and now families are finding it difficult and expensive to make that move up the ladder. Stick to areas that you know or know sufficient rental demand exists.
Ask a letting agent in the area your looking at what sort of rent you can hope to achieve before you buy a property. The yield is your rent minus costs including mortgage and fees. It has to be worth your while and better than you can achieve by leaving your money in the bank.
As well as mortgage payments, lender fees, legal fees, survey fees and possibly stamp duty you will have other costs to consider once you have bought the property. You may have to improve the standard of the property by decoration, are you renting furnished or unfurnished, are the utilities connected and in working order? You may have factors fees, landlords insurance, rent guarantee insurance, boiler insurance as well as gas safety certificates and the costs involved with using an agent.
It pays to do your homework. A good broker could save you thousands in set up costs and fees. Buy To Let investing is not for the faint hearted but it can be a profitable and worthwhile investment that tends to grow in value over virtually every 15 year period since we began recording house prices.
Good luck and choose wisely.