Online House Hunter: Buy-to-let’s back

Is there money in the buy-to-let market once more?

WITH some good bargains to be had in the struggling property market and talk of a Generation Rent looking to be eternal tenants, it’s not too surprising that people are daring to mention buy-to-rent once more.

It only seems a short while ago that everyone was looking to buy property, do it up and then rent it out in order to fund the next property in their growing portfolio.

Then the economic downturn struck and more than one over optimistic property investor had their fingers burnt. But now it seems many are being tempted back.

A survey by LSL Property Services revealed 49% of landlords though it was now a good time to invest with 68% of them expecting the number of potential tenants to increase over the next 12 months.

David Newnes, estate agency managing director for LSL Property Services, owners of Your Move and Reeds Rains, said: “Optimism among landlords is not only buoyant, but increasing. Soaring rents and climbing demand from frustrated first-time buyers are not only making buy-to-let an attractive proposition for new property investors – but are encouraging existing landlords to grow their holdings before property prices increase once more.”

But if you’re thinking of becoming a landlord either by investing in property or letting out the spare room, think carefully first. There can be a number of pitfalls, some of them costly.

Directgov and the Citizens Advice Bureau are good places to start to get your head round either being a landlord or a tenant. Thankfully the law seems much simpler and clear cut these days but commercial organisations such as 192.com offer services such as background checks on tenants.

Trade organisations such as the National Landlords Association and the Association of Residential Letting Agencies also need to be on your bookmarked favourites.

Numerous organisations offer mortgages specifically aimed at the buy-to-let market although Mr Newnes says this still remains the biggest obstacle.

As to the type of property to buy – well, there’s no shortage of advice on the web but it’s going to be the key decision you have to make. Choose the right area, the right type of property at the right price and you’re home and dry. Sounds simple enough! But thisismoney website has plenty of practical advice including a number of guides to help you.

The Independent property search engine will guide you towards homes for sale in your chosen area.

USEFUL LINKS:

• Independent online property search engine
• Independent House & Homes section
• DirectGov – Renting out your property
• AdvideGuide – Renting out your home
• Association of Residential Letting Agents
• National Landlords Association
• 192.com identity checks
• Rentchecks.com
• Thisismoney guides

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• http://twitter.com/LeadersLettings Leaders

  The best way to decide on the right property and location for your investment is to consult an experienced, independent letting specialist who is a member of ARLA. Their advice will be free, impartial and – if you choose someone with lengthy experience in the area – based on an in-depth understanding of the local lettings market. We would urge prospective investors never to rely on lettings advice from the same agent who is selling the property. Getting independent advice from the start is key to the success of your investment!

• http://www.ipinglobal.com/ IPINLive

  Buy to let might be back for the moment but there has to come a time where rents cannot continue to rise. Rising unemployment coupled with stagnating wages negate the forced rental rise perceived.

• manwhosees

  Anyone with just a little common sense, can usually spot a good investment from a Lemon.

• Stuartlaw

  Leaders, we get different different answers from letting agents when posing as renter or investor when researching rents, just the same as some agents inflate selling prices to gain instructions. Be careful and do your own research.

  Rents can continue to rise for a long time IPIN but it will be at the expense of discretionary spend on the high street so go short non-food retail over the next few years.

  The Buy to let industry is in rude health and it’s just as well given how many people are now relying on it for housing. Any attempt to supress private sector rentals with new legislation would be foolhardy and ill advised.

  Stuart Law CEO Assetz

• Stuartlaw

  Actually ManWhoSees it is not as easy as you say – we have a whole team filtering and identifying those that work and are as stated. For example auctions with properties with false and high ASTs have been known in order to lift yields, properties with problem management companies, properties in DSS areas that look otherwise alright, properties that are almost almost complete but serious hidden and underlying legal problems, the list goes on and it is dangerous territory for non professional investors.

  Stuart Law CEO Assetz

• http://www.ipinglobal.com/ IPINLive

  Hi Stuart,

  I think we have already seen a drop in consumer spending as it is – quite how much further it can fall really is the question, and how quickly when you add in the rise in unemployment and stagnating wages – both of which will only serve to accelerate the fall itself.

  I agree suppression is not the answer – however encouragement in the sector to prop up prices with changes Stamp Duty and opening up REITs to residential property is only fueling over priced property further which whether outright ownership or buy to let is too high and non-sustainable over time.

• Stuartlaw

  Leaders, we get different different answers from letting agents when posing as renter or investor when researching rents, just the same as some agents inflate selling prices to gain instructions. Be careful and do your own research.

  Rents can continue to rise for a long time IPIN but it will be at the expense of discretionary spend on the high street so go short non-food retail over the next few years.

  The Buy to let industry is in rude health and it’s just as well given how many people are now relying on it for housing. Any attempt to supress private sector rentals with new legislation would be foolhardy and ill advised.

• Stuartlaw

  Actually employment is rising and unemployment falling. Unlikely that public sector cuts will not be offset by private sector job gains. http://www.statistics.gov.uk/cci/nugget.asp?id=12