Should I invest in a buy-to-let property?

Belinda Thorpe, Managing Director of Residentsline, discusses what to think about when choosing a buy-to-let property and the difference between mortgages.

Buy-to-let properties are properties which are bought with the intention of renting them out. Investing in a buy-to-let property is a brilliant opportunity if you are in the financial position to do so. However, as with an investment, you need to be aware of what to expect and how to get the most of your money.


To help you choose the right property, we’ve put together a few key tips:

  1. Make sure you know the local property market.

Researching what is happening in your local property market will give you a good idea of what sort of properties are being rented out and what residents are looking for. Likewise, communicating with local letting agents will help you grasp some key points about the area; for example, which properties are the easiest to rent out, the types of potential tenants and what kind of property is in most demand.

  1. Think about your future tenants.

Different properties suit different people. Often, properties near a school and in a suburban area are going to attract families, whilst inner-city apartments may be more suited to young professionals. Always think about the kind of tenants your property is aimed towards, and work around that.

  1. New build or old build?

There are advantages to buying either an old or new property; new homes generally have lower costs and fewer maintenance issues, which means you won’t have to worry as much about potential future problems. However, an older property may be more financially feasible as you may be able to get a better deal on an existing property, meaning an older property would be a more lucrative investment.

  1. Don’t break the bank.

As with any investment, you need to be fully aware of the costs and expenses before venturing in. Figure out how much you can reasonably put towards mortgage and maintenance costs etc. and make sure you stick to it. Property investment margins can be small, so it is always important to make sure you’re fully aware of the financial loss and gain.


What’s the difference between a normal mortgage and a buy-to-let mortgage?

Investing in a buy-to-let property is not the same as buying a residential home, so it comes as no surprise that these types of properties require a different type of mortgage.

The key differences between a normal mortgage and a buy-to-let mortgage are outlined below:


  • The deposit for a buy-to-let mortgage is normally between 25-40% of the value of the property (although it is usually 25%).
  • The fees of a buy-to-let mortgage are normally higher than a standard mortgage.
  • Interest rates are normally higher.
  • The mortgage for a buy-to-let property is usually interest-only.


Investing in a buy-to-let property can be of huge financial gain to you. However, whether you’re an experienced investor or a first-time buyer, it’s crucial that you do your research to ensure you’re getting the most out of your money.



For more information, please call a member of the team on 0800 281 235.