Becoming a Landlord
Buying residential properties to let, rent or lease may seem like a good investment, and there are many matters to consider before you buy. The house or flat buying process is the same as a standard property purchase.
Also be aware of potential additional costs when you are budgeting to ensure the investment matches your circumstances before you decide whether becoming a landlord is the right thing for you to do.
Funding Property to Let
If you are buying a property to let as a first time investor or to increase your portfolio how you fund the purchase will form part of your monthly regular outgoings.
If you are buying with a mortgage it is more than likely the mortgage will the most expensive outgoing. Obviously the higher the deposit you pay the lower your regular monthly outgoings.
You need to consider how much you can rent the property for and also how you will pay the mortgage if the property is empty. Also bear in mind the impact of your monthly mortgage repayments if you have a variable mortgage product and there is an increase in the Bank of England base rate.
For free initial advice get in touch with our Conveyancing Solicitors.
Budget for Other Costs
Once you have budgeted to buy the property consider any additional outgoings such as regular maintenance costs and refurbishment costs. If you intend to refurbish the property it will usually be vacant over this time period, budget for the refurbishment and also any mortgage payments over this period.
You will be required to obtain Landlord Insurance which will be an additional expense to consider.
Consider tax on profit you receive from the rental. Seek specialist advice in relation to potential tax payable and any reliefs you may be able to receive.
Another main area to consider is the increased Stamp Duty Land Tax (SDLT). SDLT was increased in April 2016 to 3% for second properties which could have a significant impact on your budget.
Find the Property to Let
Once you have budgeted find a property that meets your criteria. It’s important you research the market, speak to local letting agents and research online sites such as Rightmove, Zoopla or On the Market.
Consider whether you are looking for a new or older property which may have higher maintenance costs. Once you have found a suitable property research the area and amenities. Is your catchment tenant a young family? If so are there good schools in the area, a local supermarket and good public transport links. Ask yourself ‘Why would a tenant rent my property?’ if you don’t have the answer, it may be the wrong property to buy to let.
Instruct a Conveyancing Solicitor
When you are comfortable with your budget and have found a suitable buy to let property the next step is to choose your Conveyancer or Conveyancing Solicitor.
Whether this is your first buy to let investment property or you are adding to your portfolio you need to ensure your Conveyancing Solicitor understands your investment and can support you through your journey, consider:
- If you are buying in an auction can the Conveyancing Solicitor meet the deadlines and work to your timescales?
- Is the Conveyancing Solicitor on all major buy-to-let mortgage lender panels? If they aren’t they will be unable to act for you and your new mortgage lender which could delay matters.
- Build a positive rapport with your Conveyancing Solicitor. Are they interested in your circumstances and the transaction? If you wish to refinance your portfolio at a later date would you use the same Conveyancing Solicitor?
- If you are buying a leasehold property to let consider the term of years remaining on the lease. If a lease extension is required seek further advice from your Conveyancing Solicitor in relation to the qualifying criteria and process.
What if I Inherit a Buy to Let Property?
If you are an Executor or have inherited a buy to let property subject to a mortgage, the lender will usually expect the mortgage to be repaid from the Estate. The testator (person who made the Will or gave the legacy) may have insurance to pay any balance on death, if they don’t the process could be complicated.
At Simpson Millar we have a dedicated team of Probate Solicitors who can advise you of the options when dealing with or selling a Probate property or provide general advice.
Why choose Simpson Millar?
Our expert Conveyancers and Conveyancing Solicitors are on hand to make your buy to let property investment purchase as quick and pain-free as possible. We can advise you through each stage of the transaction and support you through your investment or refinancing your buy to let property portfolio.
Our Conveyancing fees are competitive and transparent. We do not charge you an additional fee for acting on your behalf when buying a buy to let property.
Unlike other Conveyancers and Conveyancing Solicitors we do not have a menu of additional fees to add to the headline quoted fee. If, due to unforeseen circumstances additional work is required we will advise you of what is required and any additional fee that may be incurred.
If there is no additional work, the Conveyancing quote you receive is the Conveyancing fee you pay.
Very pleased to have used Simpson Millar, extremely professional & friendly. Any query we had, they dealt with it promptly and they handled the property sale most promptly. We wouldn't hesitate to use them again. Stephen.
I've used Simpson Millar previously for a sale and a purchase. This time we were selling and our conveyancer was Jamuna and she was excellent. We felt she was prompt, proactive, hard-working and really easy to talk to. I would and already have recommended Simpson Millar to friends. Matthew.
Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London, Manchester and Southport.