Buying a property to let can benefit the private landlord in two ways. Firstly, it can provide a stream of income. Secondly, many Buy to Let landlords purchase property because of the potential for long-term accumulation of capital growth. This section provides guidance about how to take out a successful buy to let mortgage, the pitfalls that may occur and the knowledge needed to avoid them.
 
There are 3 main differences in buy to let mortgages:

Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not even considered.
Interest Rate - buy to let mortgages have slightly higher interest rates.
Larger Deposit - typically a minimum of 25% of the property's value is required as a deposit.

When choosing a property to let it is wise to take advice from local letting agents to determine; what type of properties are in need, and which parts of the town are best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live. The Association of Residential Letting Agents (ARLA) state that a property needs to be in the right area, close to transport and other facilities, and in good condition.

There are a number of tax issues that need to be looked at in order to maximise your tax position, such as being able to offset your maintenance costs, letting agent fees etc as well as any interest paid on a buy to let mortgage against your tax.

You can visit the ARLA website at www.arla.co.uk for further information on becoming a private landlord.

For further information on Buy to Let mortgages, please contact us or use our “Quick Response” form.