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Basic Facts About Buy to Let
Typically, landlords set gross rent at a fee of approximately 150% of the monthly payment on the property. Taking into account the fees associated with hiring a professional estate management firm, maintaining the structure, ground rents, insurance, your mortgage payment, and other costs of property ownership, the net cash return for rental property is typically about ten percent. You can also expect property values to appreciate at a rate of approximately ten percent each year.
Borrowing money to finance to purchase of buy to let property is similar to applying for a mortgage for a home that you plan to occupy yourself. You'll need to apply for funding with a lender that offers Buy to Let mortgages, and you'll be subject to income verification and credit checks.
Most lenders offer terms ranging from five to 40 years, and require a 20 percent down payment. Many investors who own a number of properties utilise buy to let remortgages on property they currently own to get the capital needed to finance new estate purchases. Assuming you can demonstrate that the property is likely to rent, you'll be able to utilise the sums you can expect to earn in rent as partial proof of your ability to repay the loan.
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