• Twin Pine Mortgages

Thinking of Buying a Property To Let?

Purchasing a property to let is one of the most common ways people invest their savings. Buying a property to let is not an overnight decision, it’s a huge responsibility and you must always look at the entire picture before deciding this is the right investment for you.


Buying to let, simply means buying a property to rent out to tenants, rather than buying the house and living in it yourself. The investment is then made from the rent paid to you by your tenants.





Below are the four most important things to consider when deciding whether to buy a property to let.


1. Understanding the best mortgage for you


It’s important to understand that when you purchase a buy-to-let property, your mortgage will differ from a usual residential mortgage. The main difference is that your mortgage lender will consider your rental income rather than your personal income, such as your job or savings. As long as your rental income is at least 125% of the monthly interest repayments on the mortgage, your lender will grant you the loan.

With most buy-to-let properties, you can also expect the deposit needed for purchase, to be larger than a residential purchase (usually 25% instead of the usual 10%).


2. Complying with legal standards


You may already know that becoming a landlord requires you to abide by certain laws and legal standards when renting out your property to tenants. One of the most important legalities that you will enter into, is an assured shorthold tenancy with your new tenant. An assured shorthold tenancy allows the tenant a legal right to live in your property for a fixed term, usually between 6 and 12 months.

Your tenancy agreement is, in effect, a contract that ensures the landlord and the tenant know exactly where they stand, whether this is how much the rent should be and when it should be paid, who is responsible for repairing any damages, when the rent can be increased and the tenants’ rights to protect their deposit etc.


3. Your legal responsibilities as a landlord


All landlords have the legal responsibility of ensuring their property is safe for the tenant. As the homeowner, you are also responsible for the maintenance and repairs of the property, including the heating, ensuring all furniture meets fire safety regulations and that all the paperwork for these issues is provided to the tenant by law.

Before purchasing your first buy-to-let property, ensure you fully understand what is involved in becoming a landlord and whether you will be able to keep up with such a demanding role.


4. Speak to a letting agent


Due to the influence of The Deregulation Act 2015, many landlords choose to use a letting agent to manage their property and attend to any legal issues, on their behalf. Understandably, using a letting agent does cost, usually, they will take a percentage of your tenants’ monthly rent as payment for their services.

Speaking to a letting agent and learning the roles they help with, could help you further understand the responsibilities that come with a buy to let property and help influence your final decision.

Contact us today to discuss any questions you may have in regards to buy to let properties and visit our blog section to read more blogs on homeownership and mortgage advice.


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