In the wake of the news that the Inside Track Seminar company (not apparently the property arm) has gone into recievership (something Andy Shaw predicted would happen months ago) and the news that mortgages are getting harder and harder to find unless you have a GREAT track record.  However, with 30,000 new rental homes being needed every year for the next 10 years, the market is growing and this is a short term blip according to pundits. 

Tighten your belts, for the next 12 months, viralurl.com/moneygym/passivedvdmg">watch Andy and Greg’s free videos and EDUCATE yourself about what makes a great buy to let.

Here’s some excellent tips from the superb This Is Money website:

1. Do the figures stack up?

The traditional criteria with buy-to-let was to save a deposit of at least 15% and ensure that rental income would cover monthly mortgage repayments by 125%. As it got harder to meet these restrictions, many lenders eased them. This has shifted buy-to-let from a business based on steady rental income, to one where potential landlords gambling on house prices rising to deliver capital growth.

But the restrictions existed for a reason – to make sure landlords could cover gaps between tenancies, income exceeded bills and give room for rate rises.

With analysts predicting a house price slowdown and higher interest rates, sensible landlords will still protect themselves by sticking by the 125% rule. This is especially important as the current backlash against buy-to-let may lead to the abolishment of mortgage interest tax relief on buy-to-let.

2. Follow your head, not your heart

It is easy to get carried away by a property that is your ideal home rather than matching your target rental audience.

Don’t pay over the odds for a luxury designed property, you are unlikely to get the money back in rent. If you can get a bargain property that needs sprucing up, remember if it needs major renovation you will have to pay the mortgage while you do the work before you can rent it out.

3. What is the market like?

What is the demand for rental properties and who is driving it? Researching an area, its rental values, property price growth and who wants to live there is vital.

A university, big business park or airport could make one town a better rental bet, even though it may seem less attractive than a more expensive neighbour. Don’t be blinkered. If you are serious about buy-to-let as a long-term investment, then be prepared to work hard and explore different areas.

4. Does the property fit?

Who is your potential tenant? If there are a wealth of properties around, tenants may turn yours down for minor reasons. What is the local area like? Students or young professionals will want pubs, bars and good but cheap restaurants. Families want open space, schools, nice restaurants and good transport links.

5. Weigh up extra costs

Flats need maintaining, tenants need washing machines, fridges and possibly furniture. Tenants will not put up with discomfort while you save up for repairs. Make sure you factor these costs into your budget.

Decide whether you will need a letting agent or not. If you live nearby it is possible to manage your rental yourself, otherwise it can be very difficult. Letting agents may charge a 10% of rent fee, but it is often worthwhile.

READ MORE AT the  This Is Money website >>>