Property type
Once you have made the decision to invest in a buy to let property, consider the following:
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identify the type of property you want – what is best for you and what is best for the type of tenant you want? Tenants are known as ‘contract holders’ in Wales. For the avoidance of doubt, any references to ‘tenants’ also apply to ‘contract holders’ unless otherwise specified
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think practically when choosing the property - if you are aiming to rent to a single person, a one-bedroom flat with no garden may be better than a three-bedroom house. Select a property that can easily be resold if you no longer want the property
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think about the age of the property - an older property may need work carried out before you can let it out
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think about the location of the property – the needs of a tenant who is a student are different to corporate tenants or families
Purchasing the property
Once you have found the right property, you will need to arrange the finance to purchase it.
You will need to get the right mortgage product. An independent financial advisor will advise you on the buy to let mortgage products on the market and you will need the right deal at the right rate.
You will also need to carry out a survey. There are 3 types of surveys recognised by the Royal Institute of Chartered Surveyors (RICS):
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condition reports - a basic report suitable for all modern properties
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homebuyer’s reports - an extensive report suitable for all modern properties
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building surveys - a comprehensive report that is suitable for all types of modern, older, listed, altered and unusual properties and those in need of structural repair
Are you buying a property already let to a tenant?
Properties are available to purchase which are already let to a tenant. Your solicitor will check all the legal documents but there are a few points to check with the agent marketing the property.
Request a copy of the Tenancy agreement with the existing tenant. In England, this will be an assured tenancy agreement (AST). In Scotland, this may be a private residential tenancy, which replaced all ASTs and short assured tenancy agreements for new tenancies starting from 1 December 2017. In Wales, this may be an occupation contract which replaced most existing ASTs from 1 December 2022. For more information, read Residential tenancies, Residential tenancies in Scotland and Residential tenancies in Wales.
Ask whether all identity and credit checks were carried out on the tenant and if there is a deposit. If yes, will it be transferred to you?
Find out how the rent is paid (eg in advance or arrears). Ask if the tenant pays the rent on time and if the tenant has ever fallen behind on paying the rent.
What about after you have purchased the property?
Once you have purchased a buy to let property, you will need to prepare for the letting and think about how to maximise your yield. Consider things such as whether you will manage the property yourself or engage an agent and whether you will let it furnished or unfurnished. You will also need to prepare to let the property and comply with certain regulations. For more information, read Buy to let as an investment (for England and Wales) or Buy to let as an investment in Scotland (for Scotland).
