Buy to let

Buy to let is a form of investment where you buy a residential property, usually with a mortgage, and then rent it out. The 1988 Housing Act made investment in residential property more attractive to landlords when it introduced a new type of tenancy giving landlords more control over their properties. Also, the increased availability of buy to let mortgages at attractive rates of interest has increased the appeal of owning rental property.

When you buy a property to rent out, you become a landlord, so consider the implications of this carefully before committing to purchase a property. Owning investment property is not like owning your own home it is more like running a small business.

When you own a buy to let property, you will need to decide who will manage it for you.  If you manage it yourself, you will be responsible for:

• finding tenants
• checking tenants’ references
• collecting the rent and maintaining the property
• and dealing with any problems

You will also need to be aware of your legal responsibilities as a landlord such as:

• carrying out repairs
• ensuring the safety of gas and electrical appliances
• and ensuring that the furniture and furnishings meet fire safety requirements

Alternatively you may wish to use a managing agent or letting agent to look after your property for you. This will cost you approximately 10% – 15% of your monthly rental income.  But do shop around as some agents may be more competitive than this.

Here at KMS Finance we can advise you on all aspects of Buying properties to rent out and can arrange finance either via a buy to let mortgage or alternatively with Commercial Finance.

Contact us to discuss your requirements whether this is for a single property or a large portfolio of properties.

This type of finance is not regulated by the FSA.