Struggling to find the best buy-to-let mortgage in Wigan? speak to one of our buy to let mortgage advisers today
The term ‘buy to let‘ generally refers to either the practice of buying a property to be let for profit or to the type of mortgages used to purchase a property for such letting. Many countries, both in the western world and in the developing nations, have seen a surge in the growth of the buy to let property market in the last 2 decades and this has fuelled a growth in amateur landlords and the but to let mortgage providers who are keen to encourage and profit from them in turn. In addition, this growth has generated a lot of commerce in other related sectors such as buy to let insurance.
How To Find The Best Buy To Let Mortgage For Your Investment Property | Real Estate Investing Tips
Many countries, both in the western world and in the developing nations, have seen a surge in the growth of the buy to let property market in Wigan the last 2 decades and this has fuelled a growth in amateur landlords looking for quality mortgage advice, this is why mortgage brokers in Wigan who specialise in Buy-to-let are so important and the but to let mortgage providers who are keen to encourage and profit from them in turn. In addition, this growth has generated a lot of commerce in other related sectors such as buy to let insurance.
Wigan Buy to let mortgages have been available in the UK since the mid-nineties and they are specifically designed for investors to borrow money to purchase property in the private rental sector. The amount that a prospective but to let investor can borrow is generally determined by the rental valuation of the property. The annual income for a rented property has to cover a certain percentage of the mortgage repayments, the Association of Residential Letting Agents (ARLA) states that landlords should seek to be able to obtain gross rent returns equivalent to between 130 per cent and 150 per cent of the rental property’s mortgage repayments, this takes into account the surplus rent to cover costs of property maintenance and slack periods when the property may be vacant of tenants.
Wigan Buy To Let Mortgages.
Some buy to let mortgage lenders in Wigan will lend you a maximum sum based on a multiple of your salary (usually a multiple of three) plus a percentage of the forecast rental income on the property. So if your annual salary is said 30,000 Franks and the forecast rental income is 10,000 Franks they will lend you 95,000 Franks. Other mortgages, in addition to factoring in your salary, will include any existing loan commitments you have, and then apply what is known as the ‘deduction rule’. This rule relates to the annual mortgage payments worked out at a pre-set level of interest.
Buy to let mortgage interest rates are generally fairly close to residential mortgage rates but will generally be slightly higher and typically charge higher fees. This is due to the fact that buy to let loans are considered by the financial sector to represent a greater risk than residential owner-occupier mortgages, and they generally are.
The Situation in the UK About Buy To Lets
The buy to let market literally ‘exploded’ in the Wigan around the beginning of the millennium with rising property prices and the increasing availability of buy to let funding fueling a surge in would-be investors trying to cash in on the trend of the market. One reason for their popularity is the tax advantages that are available to the UK buy to let investors. Rental income is treated just like a salary by the Inland Revenue, and is therefore often taxed at 22% or even 40%. However, landlords are allowed to deduct costs from the taxable portion of their rental income, and these costs can include the interest of the buy to let mortgage repayments as well as maintenance costs on the property. These tax incentives made the buy to let market very attractive for both professional investors and amateurs looking to make the most out of their savings.
Would-Be Buy-to-let Investors
The market peaked around 2007 and now the market is saturated in many areas across the country with too many properties available to tenants. While buy to let is generally not a good idea for people who do not possess some extra budget there are a lot of remortgage deals which will fund a deposit for a home. If you are worried about losing money during void periods many companies will provide insurance which can deliver as much as six months mortgage payments in the event of a property in Wigan remaining unoccupied.
You may still be lucky, and find a hotspot but you need to do your homework and the figures correctly. Buy to let trends differ from town to town and literally from street to street. Good advice for potential investors is to visit the local letting agents who should be able to tell you who is renting what at the moment so you can define your target audience. It could be students, young professionals or families, for example. Look for areas that do have a shortage of properties and for indicators that people will move there, such as new business developments.
Buy to let mortgage deals are still rife and the rates are almost as competitive as with conventional deals. The mantra with your buy-to-let must be ‘don’t expect to get rich quickly’. You need to look long-term: an absolute minimum of five years – but probably nearer to ten years.
Rental property management - should you usea letting agent or do it yourself? Managing your own rental property can sound appealingto some people when they first start out because they’ll know they will save on the lettingagent fees.
But you should consider whats involved and be honest with yourself and thendecide whether property management is right for you.
I have 3 questions that you can ask yourselfto see if you have what it takes to be an effective property manager, coming up.
Hi I’m Andy Walker from monoperty.
Com whereI blog online about my journey as a property investor and landlord, sharing what worksfor me and what doesn’t, to help you start or expand your property portfolio.
Now it’s true, letting agents do not haveany special qualifications.
Anyone can act as a letting agent.
But what they do haveor should have, are these 3 key areas which you need to check and decide as to whetheryou can deliver them yourself.
Do You Have The Knowledge? Do you know all the steps you need to taketo comply with the law and protect your asset? For example, securing the tenants depositin a Deposit Protection Scheme, checking that prospective tenants are eligible under theRight To Rent scheme if your letting in England.
And you need to be aware of any certificatesand any licensing for your area depending on the type of property and number of occupantsthat you will have.
A good letting agent will know the answers to all these questions andmore, and they will have systems that keep them update with both national and local lettingsrules.
Do You Have The Resources? For example tenancy agreements, guarantorforms, background checks for prospective tenants and membership with professional organisationsthat you can turn to for advice or if things go wrong.
As soon as the tenant moves into a property,they become the legal occupiers of that property.
And you don't want to give tenant's that legalright until you know that all background checks, contracts, deposits, and the first monthsrent is in place.
And the last question is, Do You Have TheTime? to run a rental property legally and effectively.
Are you willing and do you havethe time to take and respond to phone calls from your tenants at all hours of the dayand night? And can you handle co-ordinating all the maintenance? I think lots of inexperienced landlords makethe mistake of not putting value on their time.
They think they are saving money bymanaging their properties themselves, but they’re not getting paid for the time thatthey’re acting as a property manager they are simply just saving 5 - 12% on their income.
I would like to point out that if you do usea letting agent, you as the landlord are still responsible for the safety of your tenants,but by employing a professional agent, you will reduce the risk of anything going wrong.
There is risk associated with any type of investment, and I like to reduce that riskwas much as I can.
As a landlord, your aim is to provide an excellentservice to your customers, otherwise your customers are not going to stay for long.
If you don't have the time, knowledge or resources to serve your tenant, you will not be providinga good service.
If you have been able to answer yes to my questions and you have a passionfor property management, then brilliant, and I wish you all the best, but if your juststarting out, I don’t want you to think that property management is easy and thatit’s a good way of cutting back on costs.
Now, everything I have mentioned in this videocan be learnt.
So why not take one step at a time if your just starting out on your propertyinvesting journey? I was a landlord for over 8 years whilst I was in the Army and I useda letting agent because I didn’t have the time to manage my properties.
But I pickedthings up during that time and got a feel for what was required to meet the standards.
Once I retired from the Army, I reviewed my situation and decided to continue using aletting agent but I dropped the maintenance services.
If any repairs are required, theagent will now contact me and I will decide whether I take it on or I give it back tothem.
Letting agents typically charge an administration fee for arranging any repairs or any maintenanceand issuing of any certificates so I decided to take that on and save on some of the costs.
Before I finish there is one piece of goodnews, and that is if you do use a letting agent, all their fees are tax deductible.
If you have any questions about property management,please leave a comment down below and if this is your first time visiting this channel definitelysubscribe so you won’t miss any of my future videos that will all be geared towards helpingyou, start or improve your property business.
Thank you so much for watching, please likeand share this video if you found it useful and I will see you soon.
and you don’t want to give tenants …….
argh! which you need to be aware of ….
argh! and … huh (exhale).
Buy To Let Deal of The Week
Welcome to MFB-TV on Wednesday 14th January.
as is our first broadcast of the year let mewish you much prosperity and success in the year ahead we think you'll be an excitinginnovative and productive year for all aspects ofthe property market and especially the financing there of.
So let's start off first of all with our Complex Buy to Let index resultsfrom the last quarter of 2014 that is available on our website today.
Inparticular I draw your attention to the fact there are now over 800 buy to let mortgage productsout there giving plenty of choice and variety for landlords of all types and needs.
We include now a new lender Fleet Mortgages who have just launched in the marketperhaps better known as the old management team from CHL Mortgage's of yesteryear.
and we are one of six appointed distributors at outset.
remortgaging continues to outstrippurchase activity but actual transaction numbers have goneup in both sectors yields yet again have increased for thevanilla HMO and more complex property typesbut interestingly enough many of you seem too boring slightly less withaverage loan to values coming down across all sectors it doesn't mean you can't borrow moreis just a conscious decision you appear to be making it's a mixed bag for loan amounts acrossall the property types so do dip into the report that's available on the websitetoday now in product news today is the launchof the first 10-year fixed-rate in the buy to let space for some timecoming out to those industry stalwarts at the mortgage works is the headlinerate of 4.
99 percent and a flat arrangement fee of £995 but with some quite eye watering ERC's so by the time you get this news itemour Sales director Steve Olejnik will have published a blog highlights the pros and cons of such anarrangement but it is innovation and well done tothe team down at The Mortgage Works for leading the field so our rate of this week is actually out of Fleet Mortgages with anew product range which is at sixty-five percent loan to valuewhich does seem too suit he lower borrowing parameter that some of you are acting to a two-year fixed at an eye wateringor a very low eye watering 2.
79 percent it's available for purchase and remortgages andis as available to individuals they also have some very good limitedcompany products albeit at a slightly higher rate a slightly higher arrangement fee this onehas a fee of 1 percent it's available on ex local authorityhouses multi-units, leasholds and free holdconversions showing flexibility in the property categories that some other lenders don't choose tooffer.
You don't have to be limited by a maximum number of properties inthe background and while they have an income threshold£25,000 that can be drawn from property and canbe on untaxed property income there is an ERC as you'd expect with such alower rate of 5 percent in the period and this runs until the28th of February 2017 so it's a fixed rate period regards to when you draw it down.
For details of that product, TMW and the whole Fleet product range dospeak to our consultants on 0845 345 6788.