Whether it is you first or your twentieth buy to let, our clients regularly ask us for tips and advice on how best they can source their properties and get deals off the ground. We therefore wanted to share you some of our “top tips” to help you make a success of your deal and most importantly so you can begin to make money.

1. Research the market and Network

If you are new to buy-to-let, what do you know about the market? Do you know the risks, as well as the benefits. Make sure buy-to-let is the investment you want and that you are happy with what you will be taking on.

If you know someone who has entered the buy-to-let market, ask them about their experiences or speak to us as fellow investors as everyone has a tale about their first property which might help you with yours.  Plus connecting and networking with other investors opens lots of new avenues and opportunities for investment and increasing your knowledge !!!

2.  Look for a promising area

Promising does not mean most expensive or cheapest. Promising means a place where people would like to live and this can be for a variety of reasons. Where in your town has a special appeal? If you are in a commuter belt, where has good transport? Where are the good schools for young families? Where do the students want to live? Where is the demand for low cost housing?

3.  Do your sums

Before you start to look at  properties think about the cost of the properties you are going to view  and the potential returns in rent or development returns you are likely to get.

Also think about your lending capacity as  buy-to-let lenders usually want rent to cover 125% of the mortgage repayments. Lenders also look for you to have  a 15% deposit,  to protect them against falling prices and depending on your circumstances some lenders are demanding 25% deposits, or even larger, a  rates considerably above residential mortgage deals. Also don’t forget lenders may require you to pay mortgage arrangement fees.

Also, factor in some contingencies for example what happens if the property sits empty for a month or two or if interest rates change?

 Once you have done this you will have a clearer picture of what you can afford and where to target your interest, but any concerns about your finances should always be discussed with your financial adviser.

4.  Don’t take the first mortgage you are offered

It sounds obvious, but shop around, as by finding the right product you could save yourself a serious amount of money !!!

5.  Target you tenant

Don’t think about living in the Property yourself and what you might necessarily like or dislike. Instead  you need to think about your likely tenant and what they would want for example most students do not expect luxury but want clean and comfortable whilst families want space and young professionals modern and stylish

6.  Be creative

The traditional buy to let route is not the only way you can become a champion investor. At MS Law LLP we specialise in working with investors on more creative routes such as Lease Options ( which can allow you control and profit from Property without necessarily owning it), Assisted Sales (where you can assist a seller  to locate a Buyer and make a profit by achieving a higher purchase price on the sale), back to back sales at profit and title splitting (as it is often the case that parts of a Property such as a building split into flats is worth more than the whole).

We at MS Law are specialists in these areas and can assist you!

7. Consider looking further afield

Most buy-to-let investors look for properties near where they live. But your town may not be the best investment. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent anyway they should do that for you.

Cast your net wider and look at towns with good commuting links that are popular with families or have a sizeable university.

8. Haggle over price

As a buy-to-let investor you have the same advantage as a first-time buyer when it comes to negotiating a discount. If you are not reliant on selling a property to buy another, then you are not part of a chain and represent less of a risk of a sale falling through. This can be a sizeable asset when negotiating a discount, especially in a tough market such as the one we have now. Make low offers and do not get talked into overpaying.

9. Know the pitfalls

Before you make any investment you should always investigate the negative aspects as well as the positive. House prices are falling and if this continues, will you be able to continue holding your investment? What will happen if you can’t remortgage? Even in popular areas properties can sit empty. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year – this gives a substantial buffer. Homes often need repairing and things can go wrong. If you do not have enough in the bank to cover a major repair to your property, such as a new boiler, do not invest yet.

10. Consider how hands-on you want to be

Buying a property is only the first step. Will you rent it out yourself or get an agent to do so. Agents will charge you a management fee, but will deal with any problems and have a good network of plumbers, electricians and other workers if things go wrong. But is always important to get the right agent if you wish to go down this route. You can make more money by renting the property out yourself but be prepared to give up weekends and evenings on viewings, advertising and repairs. If you choose an agent you do not have to go for a High Street presence, many independent agents offer an excellent and personal service.

MS Law LLP

At MS Law LLP we specialise in providing high quality property legal services.

Our distinction from many legal services firms is that this focus on property-related legal services, both for investors and people buying and selling their own home, allows us to provide a service that includes the latest knowledge of tax and finance options, ensuring the best return on investment or the smooth running of your property transaction.

We combine specialised knowledge of property law together with practical experience of domestic, commercial and investment property transactions.