Best Buy to Let Mortgage Calculators

Want to increase your profits as a landlord? Learn how by finding the best buy to let mortgages. And whilst the Bank of England base rate is retained at just 4.5%, now is still a very good time to be considering property investment or simply refinancing any buy to let properties you already have to release equity for future purchases.

It would be easy to start saying just how easy it is to become a landlord and earn income from UK investment property and how you can simply sit back and watch the profit tumble in like a cascading waterfall. The reality is that there are a number of key issues that you will have to be involved in to ensure your investment property portfolio works to its optimum. With tenants to source and vet, an investment property to maintain, buy to let mortgages to arrange, letting agents to manage and accounts to monitor, it does take a certain level of commitment. So if you are still keen to have a slice of the much talked about property game then you will want to read on to find out how to get started?

Despite the negative press that the housing market experienced at the beginning of 2005, there are a number of reports circulating that suggest that figures have shown an increase towards the end of the year. This is of course good news at the end of what some predicted would be quite a difficult year in the housing market. There is of course the question of what will happen in 2006 and the property market. It is never a precise prediction as there can be many influencing factors but what we do know for certain is that over the last few months we have seen interest rates stabilize and property pricing stablising as a result of this.

So does that mean we should avoid investing in property until the market starts to increase again. In some respects many people might suggest that investing in property at any time is a good investment. When you consider that historically property has doubled in value, and sometimes tripled in value, every last 10-15 years, then it is likely to see you a good return on your investment if you are prepared to take a long term view. Plus, there still remains a high level of activity from Landlords and investors alike with a number of buy to let mortgage providers suggesting record levels of applications being received. For those looking for a get rich quick overnight scheme, then this is not for you. But when you consider the long term gains, it might be worth reading on and don’t forget that it is worth doing plenty of research and finding out as much as you can about investing in property.
During a rising market, a property investor may decide to use this window of opportunity to release some of that equity realized in the value of the property, to use for additional property investment. However, the property investor is less likely to use that capital released during a rising market. Instead, the landlord will wait until the market has re-stablised itself or experiencing a decline. At this point, they will then use this window of opportunity to purchase lower priced property and the circle continues. That is why property investors are in it for the long term and why they see the market as being profitable to them in all conditions. And when you consider that property prices only need to increase by an average of 4.4% year on year, it is easy to see why this type of investment is so achievable.

Successful property investors will do a lot of research on areas that they believe will become property hotspots and areas which are less likely to perform. There are many areas experiencing high levels of growth and financial investment with a lot of regeneration programmes in place or planned in the future. Even by simply monitoring publications such as Construction News can give a good indication of where new commercial premises are being built which can be a good indicator of new businesses moving to the area which it turn can lead to an increase in demand for property locally.

It is the general consensus that interest rates have stablised and there is even speculation of a drop but either way, they have been steady for a good number of months now. Slower capital growth does result in buyers having to put more effort into managing and developing their portfolios. And more importantly making a profit from property. Buying property at discounted prices can be done but you must do your homework to make sure they are genuine discounts and incentives. And don’t forget that in a slowing market, vendors will be more likely to listen to your offers. Albeit if they are a bit cheeky. In particular, you can use the negative press that is often surrounded by the property market to your advantage. For example when the media are circulating stories of a dropping property market, then vendors are even more keen to listen to your offers.

How to Get Started in Buy to Let

o Do as much research as you can. You can even get some free publications including Free Buy to Let Guides
o Find out what properties are selling for. A good way of doing this is by contacting estate agents and researching on the internet. A good way is to look at property house price websites.
o What is the level of demand for rental properties in the area
o What type of property is most in demand. For example, if it is a university city, then the demand for shared student accommodation may be much higher than property for professional sharers.
o Find out what rent is being achieved on those properties and the likely time to get the property let out. Speak to letting agents and local businesses that may be letting properties already in the area.
o Raising deposits for your investment properties, may be easier than you think by releasing equity from any of your existing properties.

So how Do you know if you have bought a good investment

Well there is always an element of risk but providing you follow the main logic you should eliminate most of them. It is also important to make sure you continue to review your buy to let mortgage funding on a regular basis as this can have a big impact on your success and cash flow. As we have said above, the property market can rise as well as fall so providing that you have some cash funds in the bank to help you through any tougher market conditions then you could reap the rewards in years to come. But it’s important that you calculate these carefully into your projections to ensure that whatever funding you may need to input into the investment property that it will be outweighed by the eventual gain.

Providing that you are buying a good quality property in a good area with strong rental demand then it’s worth considering. Don’t just buy a property because it is cheap. You might buy a property at a very discounted price, but if you can’t let it, you could find yourself covering the buy to let mortgage payments for months to come which will see a big dent in your profits. Find out why it is cheap. Is there an increase in crime in the area, have plans been submitted for a large industrial unit to be built behind the garden etc, etc. Do your research. And don’t be afraid to develop a property for profit. Buying at the right price, in the right area and doing the right renovation on the property, can also see you return a decent profit. Re-financing the property on completion and letting it out could give you the best of both worlds.

Having taken into account all the considerations above, to calculate if it is a good investment, you need to ensure that your annual rental income exceeds the cost of your monthly buy to let mortgage repayments and maintenance costs. And it is more likely that your annual rental income will be stronger if you select an investment property in area with a strong and growing rental demand as it is less likely that you will experience rental voids and be supplementing the monthly buy to let repayments.

So in conclusion the property market is likely to remain a prime choice for property investors as long as they are will to commit to the long term.

Firstly, you need to establish if this is the right time for you to become a landlord and how much it is going to cost you. Can you afford to tie up money in a property? If the worst comes to the worst, can you afford to lose that money?
Before you agree on the purchase price of a buy to let property, it is important to find out from local letting agents, what the likely rent could be. They should be able to let you know which types of property are in highest demand and which areas are the most sought after for tenants. If you need to find out whether your potential buy to let is looking like a good investment, ask your broker/lender to work out the yield (ie the money you are investing and the rental income you will receive) on the property against what your repayments are likely to be. I you are investing in an up and coming area, it could still be a viable investment despite the figures not looking too healthy today. If you believe that the area will be having a lot of other investment or new businesses moving in, then there is the possibility that the surrounding property market will have a positive knock on effect. When the valuation is carried out on the property, the surveyor who visits the property will also be expected to give an assessment of the expected rent as well as the value of the property.