Buy to Let Success: Martin Roberts Shares Key Insights

What is Buy To Let?

Buy-to-let is an investment strategy whereby someone buys a property with the intention of letting it out to tenants. You can obtain buy-to-let mortgages in which you only need to pay the interest on the mortgage for a fixed time, after which the principal loan sum is due. This is usually paid off when the property is sold, ideally leaving you with some profit as the property appreciates in value. Buy to let is a good way for budding property investors to start their investment journey, as they can rent out this property and start making a profit from the rent while building equity in the property at the same time.

What Are Buy To Let Mortgages?

Buy-to-let mortgages are special mortgage products for people who are purchasing a property as an investment rather than to live in themselves. They have a higher deposit requirement than residential mortgages (usually at least 25% of the property’s value) and offer interest-only payments. The interest rate is determined by looking at the   (percentage representing the amount of money you are borrowing compared to the value of the property), the borrower’s credit history, the Bank of England base rate and whether or not the mortgage is fixed or variable rate.

At the end of the mortgage term, the borrower repays the capital debt, i.e. the full amount of the mortgage. Some borrowers invest their profits from renting the property into an ISA to repay the capital or use these profits to reinvest in other properties. Often, the borrower will sell the investment property to pay off the debt. Ideally, the property will have gained value over time, leaving the borrower with more profit after the sale. Like other mortgages, lenders will look at the borrower’s credit history and income when offering them a BTL mortgage. You also need to be over 21 to obtain a buy-to-let mortgage.

FAQ: How can I get the best deal on a BTL mortgage?

To get the best deal possible on a buy-to-let mortgage, shop around and compare a wide range of deals to see which offers the cheapest rate, do as much as possible to improve your credit score, consider whether a fixed rate or variable rate mortgage is more suitable, and check what fees are attached to different mortgages to find the best one for you.

Choosing a Buy To Let Property

Choosing the right property for the buy-to-let strategy is essential to maximise your profits. Think about the type of property you want to invest in, and what kind of tenant you want to attract. For example, if you want to rent to students, take a look at what universities are in the area and what the demand is for student housing. If you plan to rent to families, think about what they are looking for in a rental property – several bedrooms, outdoor space, security and parking will be important.

Consider the location – this is perhaps one of the most important aspects of a buy-to-let property. What else is in the area? Are there good transport links and local amenities like shops? Is the area affluent, modest, or perhaps more impoverished? Are there any regeneration schemes occurring nearby? Think about future planned developments and how they might affect the property’s value. Also, consider the maintenance costs of the property. As the owner and landlord, you will be responsible for keeping the property in good shape, both to attract tenants and to protect your investment.

please can you add something to explain what LTV means in layman terms, for readers who are new to property?