Little wonder that buy to let has become a popular means of investment. Many people buy properties rather than take out pensions or invest on the stock market. However, buy to let – like any other investment – involves an element of risk which should not be ignored or understated.

Having said that, if you go into the buy to let market with an awareness of the potential pitfalls, then you have every chance of creating a sound investment.
So what are the potential pitfalls?

1) Not enough research. Find out about the area in
1) which you wish to buy. Make sure that the property 1) will be in demand to rent.
2) Not having an efficient letting agent. Choose one
1) from the Association of Residential Letting Agents
1) (ARLA)
3) Not setting a budget.

Point 3 can’t be stressed enough. It’s important to make sure you calculate the size of your deposit, plus any new furnishings you may need to purchase. Check out our online mortgage calculators.

Finding the best buy to let mortgage rates is also key to your being able to afford to purchase. Mortgage lenders offer competitive rates for buy to lets – it’s all about finding them.

Using a broker like CFS for free mortgage advice can make all the difference – especially with buy to let mortgages. As one of our buy to let customers said: “The reason I always use CFS is; “Without my adviser’s help, we wouldn’t have been able to do it”.

Most buy to let mortgage deals vary between (typically) 75% to 90% loan to value (LTV), so this could limit what you can afford to purchase. Mortgage lenders will expect you to be able to predict the rental income you will receive from the buy to let property.

Finally, if you have found a great mortgage rate and haven’t paid a mortgage broker fee, then you can afford to make sure that you don’t cut financial corners at the last hurdle. If you are buying an old property, make sure you organise a full structural survey or Homebuyers report. Don’t procrastinate when it comes to undertaking renovation work and ensure that you have tenants ready to move in as soon as the work completes. Don’t ignore any health and safety requirements, and do make sure that you have a tenancy agreement in place. Good luck!