Top 10 Tips for Investing in a Buy to Let Property in the UK

An increasing number of individuals are looking to purchase buy to let properties, for the sole reason that the market is currently full of opportunities and the potential for profit. There is quite a lot involved in these types of investments though, which is why most of those who go into the business end up quitting; wasting time, money and effort with little to gain.

This is why getting tips from an expert in the industry can be a huge step towards fully understanding what needs to be done and actually making a profit. To assist you in this journey, we’ve put together 10 tips that we think will help you to make the best start possible and reach your full potential.

1: What does it generally involve?

Before you get into the world of buy to let properties, it’s crucial to first have an understanding of what it is and what you’ll need to do. While the UK market may hold a lot of potential, it’s important to understand how you should go about investing and renting out a property to get the highest amount of cash possible. A lot of preparation is often needed, so you’ll likely have to dedicate a decent amount of time to ensure that you achieve the best possible outcome from your endeavours. 

2: Consider the different strategies that are available to you

In most cases, it’s worthwhile to remember that there are often many different methods to do one thing – and the path that you choose could make a huge difference to the end result of your venture. This is why taking the time to look into some of the strategies available can be an excellent idea for anyone hoping to have a solid start. There are many options, including:

• Hotel investment
• HMO Investment
• Traditional investment
• Residential investment
• Student investment

3: Take the time to better understand the UK property market

When you look at the statistics, you’re likely to notice that the market has declined slowly over the years. This is mainly due to prices increasing and the way that tax policies have changed. Even with this in mind, the potential benefits that can come with investing are still considered to be more than worth it. Thanks to the demand in quality rental properties, there are many people who will be interested in living in your accommodation. 

4: Understand the risks that are involved

The rewards can be incredible, especially for those who are fortunate and put in the time and effort to make the most out of their venture. However, it’s still important to remember that things don’t always go to plan and that there are sometimes risks. If it was the perfect investment with no issues and worries at all, almost everyone would be in the business – and if this were the case, there would be less properties available to purchase and the prices would be much higher.

5: Decide where in the UK you want to invest

When you feel ready to get into the business and start your own journey, there are still likely to be many choices that you’ll need to make before you can actually begin – one of which is where you should search for the top investment opportunities. A wise individual will only investigate purchasing in parts of the UK that are performing at their fullest, taking all the different factors into consideration to ensure that the area they buy into will provide maximum profit.

6: Refurb or off-plan?

You’re sure to find there are a range of opportunities wherever you look, with some being refurbished and others being off-plan properties – and it can be important to understand the differences between the two and which is likely to generate the highest return. Basically, off-plan buildings aren’t fully complete and are still in the developmental (or even planning) stages, whereas refurbs are generally older properties that have been renovated. Both have their advantages and disadvantages, so be sure you choose wisely.

7: Never underestimate the importance of due diligence

Regardless of how good a potential property may seem, it’s always best to be vigilant and ensure that everything is above board and as it should be. This is why due diligence can be such an important part of an investment, since it’s an extensive process that involves researching and fully looking into the building to find any flaws that you may not have noticed at first glance.

8: Consider creating an exit strategy

In this industry, an exit strategy is essentially a plan for if or when the owner decides to sell their buy to let accommodation later on in life. Even if you currently have no intention of doing so, it’s often far more beneficial for an individual to have an exit strategy ready for if you ever decide to relocate your business or retire, as a couple of common examples.  

9: How to get the best rental yield

There are competitive rental returns in many parts of the United Kingdom – and rental yields are crucial to anyone who wants to get the most from their venture. Anything above 5% is a good, strong yield, although buildings higher than 8 are the most favourable. You can calculate a properties’ rental yield percentage by taking the yearly rental income and dividing it by the purchase price and multiplying the result by 10.

10: Get advice from experts in the field

If you’re certain that you’re ready to get into buy to let investments, the last piece of advice we have to offer is to hire a professional to assist you through the process. More often than not, allowing someone with more experience to help you can make a huge difference to the end result. Saving time, effort and money are all things that you should aspire to do – and often, a specialist will have the skills, experience and understanding to ensure that you make the most of your investment.