1.
Research the market in Basingstoke
If you are just getting into buy-to-let in Basingstoke,
you must ask yourself a few questions. what do you know about the market in Basingstoke? Do you know the risks, as well as
the benefits. you should follow the local news and really get an understand of
the community you are about to invest in.
Make sure a buy-to-let is an investment you are sure you want. Your funds could
perform better elsewhere. In 2007 a high-rate savings account would beat most
investments. Now that rates are lower, investing in buy-to-let means tying up
capital in a house that may drop in value. Compare this to the possibility of a
annual return on a fixed rate savings fund.
You could also get a similar return from an investment in funds, shares or an
investment trust - paying just 10 per cent tax on income and getting tax-free
capital growth through an Isa - with the ability to sell up quickly if you
want.
If you know someone who has entered the buy-to-let market, ask them about their
experiences.
Message boards: Talk to other buy-to-let investors
2. Choose a promising areas or streets for buy to let
Promising does not mean most just the cost. Promising means a place in Basingstoke where people would enjoy living and
this can be for a variety of reasons.
Where in your Basingstoke has a
additional value ? If you are in a commuter belt, where has good transport
links? Where are the good schools in Basingstoke
for young families? Where do the students in Basingstoke
want to live? Asking yourself these questions might sound over
simplistic, but they are probably the most important aspect of a successful
buy-to-let investment
Zoopla: Check the rental market and homes to buy
3. Do the sums
Before you think about looking around houses or flats in Basingstoke sit down with a pen and paper and
write down the cost of houses you are looking at and the return you are likely
to make.
Traditionally buy-to-let lenders wanted rent to cover 125% of the mortgage
payments, although many had relaxed this in the boom years. Most also wanted a
15% deposit, which protects against falling prices.
After the financial crisis, many are now demanding upto 25% deposits, or even
larger, for rates considerably above residential mortgage deals. The best
buy-to-let mortgages also come with additional arrangement fees.
Once you have the mortgage rate sorted - and remember to allow yourself a
margin for rate rises in years to come, be careful in deciding will your
investment work out?
What will happen if the house or flat in Basingstoke
sits empty for a month, two months or even three? These are all things that
must be consider. Make sure you know how much the mortgage will be and if it
could rise or fall.
