How-to Guides » OLD GUIDE Become a buy-to-let landlord

Pick the right property

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1) Get the right property
Decide what type of property suits your needs, whether a four-bed house or two-bed flat for example.

Make this decision based on the rental market. What type of properties let well in your chosen location? Family homes are not always the best idea, while two-bed flats tend to let well in many urban centres.

2) Location, location, location

Choose the area you want to buy in based on cold hard facts, not because of an emotional attachment and not because you live there, or like the area.

As a rule of thumb, urban areas with good transport links into a town or city, plenty of local shops, bars and restaurants are good rental locations.

3) Be cautious of new builds
If you are thinking of buying a new build property, it pays to be very careful indeed.
These properties, particularly new build flats, have fallen in value faster and further than other types of property.

Also if the developer or owner offers to 'pay your deposit' in the form of a discount, be wary. If they say it's worth £200,000 but they will sell it for £150,000 allowing you to effectively put down a £50,000 deposit, remember it is really only worth £150,000.

You know that, the owner knows that and the mortgage lender needs to know that. If you don't inform your lender of any discounts on new builds you will be committing mortgage fraud.

4) Visit letting agents
Get an accurate idea of the rents you can expect by posing as a buyer and a landlord. Do this twice to make sure you get the truth from agents - first as a tenant looking to rent a property similar to the type you are interested in buying, to find out what the market rates for rent are (or send a friend).

And once again as a potential landlord, asking what rents are achievable and what the typical purchase prices would be on the type of property you are interested in.