Getting Started in Buy-to-Let Kendal

For some, buying a property to let can generate a full-time income, and the task of managing more than one or two properties can become a job in itself. SmallBusiness.co.uk teamed up with Gee Sahota, from Simply Business to offer some basics to get you started.

Buy-to-let mortgages - Typically the rates are higher than for a residential mortgage and you’ll probably need to put down a 20 per cent deposit, as most lenders limit the loan amount or ‘loan to value’ (LTV) to 80 per cent.

Many lenders offer mortgages based on the anticipated rental income, so you don’t need to be earning a large salary to jump on to the property ladder. Once you’re in motion, some lender schemes will allow you to release equity from one rental property to raise money for your next project.

There is an interesting article about the buy-to-let market on WhatInvestment.co.uk.

Location - The key to maximising your rent potential is to research the area you wish to buy in. Focus on locations where rental demand is high and make sure the area you choose has properties that would suit the type of tenant you are looking for. It’s important to keep a close eye on the market and liaise with local letting agents to gauge how the market is performing in that area.

Landlord's insurance - There are specialist landlord policies available which cover almost every eventuality; from the building itself, the contents, emergency legal costs, loss of rent if a tenant doesn’t pay and public and occupier liabilities.

Visit SimplyBusiness.co.uk for more information on landlords insurance.

Property Management - Examine prospective tenants carefully and check references before contracts are given and signed. If taking a deposit from the tenant, landlords for shorthold tenancies in England and Wales are legally obliged to place it into government-authorised tenancy deposit schemes. These help resolve any potential DISPUTES when the tenancy comes to an end.

Find more information on tenancy deposit protection here.

Find info on tenancy agreements here.

Buy a template tenancy agreement here.

Maintenance - When considering ongoing maintenance of the property, it’s a good idea to create a separate pot of cash to deal with potential costs of repairs and necessary checks. This will help you keep track of your outgoings for tax purposes.

An annual maintenance requirement is that you have a Corgi registered gas or electricity engineer provide you with a safety certificate on all gas and electricity appliances.

You can get lots of advice from the Residential Landlords Association here.

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