First-time investors

If you’re new to property investment, then you’re in the right place.

When done correctly, investing in property can be hugely rewarding, which is why doing your homework before jumping in is well worthwhile.

It can feel like a daunting and scary topic to get your head around especially with so much legislation to stay on top of, which is why we’ve tried to make it as straightforward as possible for you.

What is buy-to-let?

Quite simply, buy-to-let refers to taking out a specific type of mortgage on a property where you intend to let the property out to a tenant, and not live in it yourself. By letting out this property you, in turn, become a landlord, which comes with many responsibilities you should be aware of.

If you’re thinking about purchasing a property using a buy-to-let mortgage, ask yourself the following questions before moving ahead:

Do you have the time to be a landlord?

You will need to be realistic about how much time you have available in your existing schedule to manage any future tenancies and consider early on whether or not you will require a lettings agent to help you manage these. Find out more about landlord responsibilities here.

Do you have your finances in order?

Just like buying a property to live in, you will need to ensure your finances are all in check before looking to purchase property to rent out. This is especially the case if you are looking to obtain a buy-to-let mortgage or other financing options.

Are you more interested in yield or capital growth?

Rental yield and capital growth are the two most common ways landlords and investors look to increase their return on investment.

Where and what would you like to buy?

Buying a property that’s near to where you live versus on the other side of the country are two very different things and need careful consideration. First of all, you will need to consider whether you’re looking for a residential or a commercial property. If residential, you will then need to decide if you’re looking for a new build or off-plan property, a resale property or perhaps even an auction property.

TIP: Let us know which areas you’re interested in investing in and we’ll send you a personalised, monthly email detailing how property prices and rents have changed, along with investment opportunities. Find out more about our investor newsletter here.

The following outlines some benefits to investing in different property types:

Newly built property Resale property Commercial property
NHBC Warranty Accessible – for all budgets and abilities High yield returns
2 year appliance cover Monthly yield Diversified risk due to multi-tenanted properties
Developer incentives Capital growth Potential tax benefits
No remedial work No waiting time for the property to be built Long multi-year leases make income more predictable
Potential yield schemes Usually operate limited hours so call-outs would likely be during business hours