Buy To Let Investment: How To Guarantee Long-term Success

In recent years, people have become more mobile as working patterns have changed. As a result, the demand for rented properties soared ? boosting the buy to let market at the same time. But now in the midst of a credit crunch, some are saying that buy to let properties are not the best investment to have. This may be true for those with a purely short term outlook, however it doesn't mean that buy to lets have become a thing of the past. If you play your cards right, you'll see that buy to let investment is going to be one of the best you've undertaken.

If you're looking to become successful in the buy to let arena, you should take a long-term approach. Being able to stay longer in the market is more important than timing it. If you try to guess the market's highs and lows, you're almost certain to be mistaken. So how do you make sure that you'll be able to survive the market and make considerable returns in certain areas with the least risk? Through the following simple but extremely crucial tasks:

Do your research

Prior to purchasing a buy to let investment property, you need to choose the right property. The state of the property, its type and location are three of the most important elements to bear in mind. This is where research comes in. Visiting local estate agents will help you as they are in a better position to help you get a thorough understanding of the market you're interested in. Asking nearby locals will likewise help you get acquainted with the area of interest.

Don't forget to include in your investigation local demand for rental properties and an evaluation of future demand. Make sure too that the market is not saturated with rental accommodations. This will help ensure that you'll be able to let your property for a long time.

Budget properly

Before making a property purchase, make sure you have done the maths. Crunching the numbers before you put down the deposit for your buy to let investment will help you stick to your budget. In general, you have to put aside an estimated 20% of rent to cover management fees, insurance and maintenance. There is also a need to set aside some cashflow for void periods approximated at one month each year.

If you want to gain significant savings, you should consider purchasing properties below market value (BMV). Due to the current crisis, many properties were repossessed because their previous owners were unable to pay their mortgages. You can find BMV properties at auctions or you can seek out motivated sellers yourself. They are typically keen on unloading their properties in exchange for a quick sale. This is due to urgent reasons such as repossession, divorce, bereavement or bankruptcy.

Take a long term view

When investing in a buy to let investment property, taking a long-term approach is consistently regarded as the best strategy. Instead of making a quick profit, property investors are better off by staying in the market for a considerable period of time. This way, you give your property time to bounce back in the years ahead. To achieve capital growth in long-term property investment, some of the most important factors to take into account are sensible gearing and risk mitigation.

Property is an excellent investment for the long-term as it presents the opportunity to provide good income from monthly rents and capital growth, which in the past two decades has displayed excellent results. That's one very good reason to stay in the property market for the long haul.