Tenancy Key Fact

The tenant is responsible for all utility bills, council tax and the TV license fees. You will also have to bear any legal costs associated with drawing up a formal rental contract.

Tenancy Deposit Scheme

Since April 6, 2007, landlords taking tenancy deposits have to join a tenancy deposit scheme to protect the money and ensure that a fair amount is returned to the tenant at the end of the tenancy.


Buy to Let property

1. Choosing a buy to let property

Make sure the property is suitable for letting - an obvious statement but sometimes overlooked!You are more likely to find tenants for a city centre flat than a country cottage.

Avoid purchasing a property which has potential maintenance problems, as this could be a constant drain on your resources.

2.Arranging Finance for a buy to let property

In today's market Landlords need a deposit of at least 25 per cent of a property’s value to obtain a buy-to-let mortgage. Lenders will also take into account is rental cover – the amount of rent that covers the mortgage. Lenders commonly insist on 120 per cent or even 130 per cent cover to ensure that landlords have a buffer to pay for running costs. Se our buy to let mortgage guide

3. Finding tenants for your buy to let property

A letting agent can prepare tenancy agreements, find a suitable tenant and generally help with managing the let including providing advice on inventory, condition reports and changes to utility accounts and council tax. They will also collect the rent and pay the balances to your account. Charges typically range from 10- 15% of the rental income.

4. Rental returns on a buy to let property

A rental yield is simply the return on the capital, so if the property value is £100,000 and a landlord receives £4,000 in rent, the yield is 4 per cent. In addition to this the landlord has to consider the capital value of his asset. Whereas a few years ago when property prices were increasing rapidly this gave a high overall return, recent falling property values have led many buy to let landlords to take a much more cautious approach in purchasing property.

 

If you are thinking of a buy to let property keep in touch with the market by looking at our buy to let news which is updated weekly.