Top Five Tips to be a Successful Buy to Let Investor

publication date: May 27, 2009
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Top Five Tips to be a Successful Buy to Let Investor

In today’s recessionary times, with falling house prices and rental income, what you have to do to become or even remain a Buy to Let Investor. Follow our top five tips below as a quick guide to how to succeed.

1. Make sure you have planned your investment exit strategy

We only know how successful we’ve been as an investor when we cash our investments in and work out the amount we have earned minus the original costs. So to ensure you make all the right decisions about a current or future portfolio, you HAVE to have worked out:-

a. How much money you want to make
b. When you need that money by
c. Track on a quarterly basis how well you are doing

2. Find properties that you could buy in today’s market and sell for a profit tomorrow if needed

In other words, you need to find properties which can be sold for a lot more money if you renovated them by adding extra bedrooms or bathrooms, or even a property on a big plot that would enable you to build another property.

You also need to make sure you are buying property at a ‘discount’ versus today’s market. So if a property would sell for £150,000 today, you need to buy it at a 10-30% discount.

3. Don’t be fooled by ‘no money down’ or ‘we source discounted property’ companies!

Many of these companies don’t operate within the law. They find ways of ‘creative financing’ which can be construed as mortgage fraud. They also tend to overvalue properties and sell them to you at a value that a buyer wouldn’t pay in today’s market and some don’t even allow you to SEE the property!

The only companies that you can trust are ones that let you use your own Surveyor, Mortgage Broker and Conveyancer, who are not connected to the sourcing company. They will be upfront about their fees and ideally only ever earn money when you do.

4. Don’t Invest on Your Own!

The days of buying any property and being able to rent it out for more than the costs and secure great capital growth are over for some years now. Many investors who have ‘gone it alone’ are now either broke or operating illegally – often unknowingly!

It is essential to know a good letting agent or two, a good financial or wealth advisor, someone who can help you value a property and someone you can turn to for legal help as well as a specialist property tax consultant.

Without this kind of support over the coming years, you will find it tough to make the right decisions. It is how the successful professionals work, so if you want to be successful, follow in their footsteps!
5. Cover all your Risks

It is easy to go from day to day thinking that nothing bad will happen to our property investments. However, things do go wrong, fires happen; pipes leak; tenants don’t pay their rent or damage your property. We’ve even got an increase in the number of let properties being turned into cannabis factories! On top of this, investors get sick or lose jobs.

It’s essential that you secure bespoke insurance packages that have been created by buy to let professionals (ie not Tesco!). Sometimes you may pay a little more, but they will give you peace of mind AND save you a fortune if something goes wrong.

Get a helping hand with Kate Faulkner's Buy to Let Property Pack for just £59.95!

This unique service, where you purchase a ‘property project pack’ gives you:-
  • An A4 ‘how to’ guide (approx 80 pages), containing Dos and Don’ts, Factsheets, Checklists, Handy Tips and Forms
  • Access to Kate and her team, by phone and email, for any queries you might have during your project.

See the full list of Kate Faulkner's unique Property Services here!

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