If you’re considering becoming a landlord, there are many elements to
consider and understand before you purchase a property. The process of buying a
buy-to-let property differs compared to buying a residential property that you
will live in yourself, so it’s good to know what exactly to expect. Of course,
it’s a long-term investment that shouldn’t be made in haste, so if you’re
reading this, you are probably looking for the right kind of information.

Our team at Moving You are experts in buy-to-let advice, so here is our
straight forward guide to purchasing a buy-to-let property in South Wales.

What
is buy-to-let?

First things first, the basics: buy-to-let is a property that is
specifically purchased with the intention to rent it out to tenants. It’s an
investment property that can generate a monthly income, as long as the rent
being charged is higher than the monthly buy-to-let mortgage payments. 

A buy-to-let mortgage is different to a residential mortgage, and if you
can’t afford to simply buy the property outright, you will need to apply for
one. When applying for a standard mortgage, your income is taken into
consideration, whereas with a buy-to-let loan, the lender considers the
potential rental income as your primary income source, and considers your
personal income as secondary. The interest rates tend to be lower, but they
have larger upfront fees, so keep that in mind. Moreover, deposits on
buy-to-let mortgages are also typically larger than the deposit needed for a
standard mortgage, so expect to put down at least 25% more than you normally
would. 

What
kind of buy-to-let property should you buy?

The right property is important and can include factors such as the
location in proximity to amenities and transport, as well as the neighbourhood
and the demand in the area. Much like when you’re searching for your own place
to live, you should ensure you do adequate research into the area you want your
buy-to-let property to be located in. 

Consider what kind of tenant you want to target and include that in your
research. If you’re trying to rent to families, your best bet is to find a
property in the suburbs close to good schools. If you want to rent to students,
a property near a university and good but cheap restaurants and nightlife is
key. Keep in mind, the type of tenants you have renting from you can affect
your mortgage, as many lenders have restrictions on student rentals, for
example. 

Do
you need buy-to-let insurance? 

The short answer is yes; you should have buy-to-let insurance (also
known as landlord insurance). It gives you coverage for the building and the
contents inside and any landlord liabilities. 

Building insurance is often required by your mortgage lender in order to
secure a loan and will compensate you if your property is destroyed or damaged.
This will cover the repairs or rebuilding costs so you don’t have to pay huge
expenses out of pocket. 

Contents insurance will cover any furniture inside the property. It’s a
smart idea to get contents insurance even if your buy-to-let property is
unfurnished because you can choose what level of cover you require, and it can
protect any curtains, carpets, and other furnishings that essentially come with
your property between tenants. If you choose to rent your property unfurnished,
your tenants will be responsible for their own contents insurance when they
move in. 

Landlord liability is mostly your choice, but if you’re renting to
students, for example, there may be a minimum level required. This covers you
for any injuries or deaths of any tenants or visitors in your property. 

Do
you need to use a letting agent?

This answer is dependent on the budget you’re working with and the level
of involvement you wish to have with your buy-to-let property. If you want to
be a very hands-on landlord, you may not want to go through a letting agent or
agency, but if you would rather take a more hands-off approach, it is a good
idea to enlist the help of a professional, experienced lettings agency.  

Letting agents like us will help you carry out credit checks on your
potential tenants, help you come up with a letting contract, chase late rental
payments for you, help with any maintenance on site that needs to be done, and
assist with mandatory safety and efficiency checks for gas and energy. 

The fees to work with a letting agent typically include paying an
ongoing fee to manage the property which varies, so it’s always best to speak
with your chosen letting agent to get a complete idea of costs .

Generally, utilising the services of a letting agent can take a big
burden off your shoulders if you are a budding landlord!

For professional advice on purchasing a buy-to-let property in Bridgend
, contact our expert team at Moving You on 03334041188 or email
info@moving-you.co.uk.