Planning Your Buy-to-Let Mortgage

Written By PropertyLoop
March 04, 2021

If you’re thinking of investing in property, a buy-to-let mortgage could help give you a substantial return on your investment. However, when choosing both your property and your mortgage, it’s important to do your research as well as take the time to talk to an online property agent.

There are also a fair few risks when entering the property market. One main issue is that the value of your property could well decrease over time, so it’s essential you take your time before comitting to buying something. Unless you’re paying for everything up front or have capital at your disposal, you may have to take out a regular mortgage to cover your initial deposit. If property values rise, that could mean good news. But if they fall, your deposit can take a big hit whilst your mortgage rates stay the same.

When renting your property out, the higher you manage to make the rents, the more money you’ll be able to accrue when paying your mortgage. But it’s important to realise that you’ll often have to invest more money initially into the running of the property.

Where Is a Good Place to Buy a Rental Property?

When considering a buy-to-let, you should heavily research property locations. This doesn’t just mean in terms of cheap or expensive. If areas often contain a lot of vacant properties, it’s probably best to avoid them. Conversely, if demand for housing in an area is high, this could make for a much more prudent investment. Just be sure to look out for a few things whilst you’re searching for property to invest in:

  • Does the property offer good travel links for the work commute?
  • Is it an area popular with renters interested in nightlife and culture?
  • Does the area offer good schools?
  • Is it close to the city centre, a high street or nearby amenities?
  • It is close to a park or green space?

It’s extremely wise to try to pinpoint the type of tenant you want. If it’s students, keeping the place clean, clear and comfy with a lower rental price is essential. Older renters may value more features in a home as well as security and a nice neighbourhood. They are also likely to have a little more disposable income. Making a place feel a little more homely may also result in longer tenancy agreements.

Stick to Your Budget

When making an investment, don’t overshoot. Plan and budget in detail. Commonly, mortgage providers require the rent to cover around 125% of the mortgage repayments, with around 25% of the property’s value put up as a deposit.

Invest Time And Responsibility Wisely

It’s also critical to decide how much of a hands-on landlord you want to be. If you’re keen to rent the property off of your own back you’ll save the fees you’ll incur by doing it via a lettings agency, but at the same time will be the first port of call when any mishaps occur. This means you’ll be on the phone to electricians or plumbers. This may nor may not be something you’d like to take on, but if you’ve already got a fair few contacts, then it’s a great way to save cash that would ordinarily go to a letting agency.

Why continue paying thousands each year in commission to let your property? With 97% of landlords recommending our services, and with over 50,000 tenants joining our rental community in the last year alone PropertyLoop is welcoming a new era of renting.

The PropertyLoop platform establishes the trust, transparency and personal service that has been lost from the renting sector. We are anything but another faceless corporation looking to profit from your investment, but a community founded on expertise and ambition.

We offer landlords complete clarity on available specialists through a landlord controlled rating and review system, giving users complete confidence of your PropertyPro’s proven results in finding owner’s ideal tenants faster.

With PropertyLoop landlords will have everything they need to let out their rental from start to finish, with no hidden fees, financial barriers or catches; only a revolutionary new way to let.

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