The 4Cs Of Investing In Buy To Let
A few guidelines for BTL property investment
1. CENTRAL AREAS
As an investor, you want to minimize vacancy times while increasing your pool of possible renters. That implies picking cities or towns, rather than anywhere more than a few miles out. The town or city’s population should be at least 60,000 and decent access to transportation links.
2. CASH FLOW
The monthly cash flow must include a buffer that allows the investor to profit while allowing for unknown maintenance expenses and empty periods. Make sure you understand how to establish a conservative investment case from the start, so you have a firm grasp on the net monthly cash flow. When using mortgage loans, focus on the return on cash rather than gross yields.
3. CAPITAL APPRECIATION
House price rises are hard to anticipate, therefore look for inexpensive areas with opportunity to expand rather than overpriced towns and cities. Secondary towns are more likely to be affected than major cities like Birmingham or Manchester. Avoid areas that have typically drifted sideways for years.
4. CONTINGENCY
Although it may seem apparent, to most investors, plan for the unexpected during both the purchasing phase and as a landlord in terms of upkeep. And hold some money aside for the unexpected…
