How to find the right investment property

By Pippa Thompson

When buying an investment property it’s important to leave your personal preferences behind. Instead, consider your target tenant and think what features will attract their interest. Putting their needs first will hopefully result in a speedy let.

Budget

Before entering the buy-to-let arena it is crucial to do the maths. Generally BTL lenders require a deposit of 25 %, some even more. Remember that lenders require rental income to cover between 110% and 125% of the mortgage repayments at a stress tested interest rate (usually around 5-6% per annum).

If you’re opting for a tracker mortgage, don’t forget to factor rate increases. Also consider if you have contingency funds to delve into if the property remains empty for a couple of months. Are there funds available to cover additional costs such as maintenance costs or agency fees?

Hands-on or hands-off landlord?

If renting out the property yourself, then the responsibility for maintenance and repairs is yours. Decide if you can devote the time to attend to this and ask yourself how quickly can you respond? Where will you advertise your property? Are you prepared to conduct viewings – giving up evenings and weekends to show prospective tenants round the property and take up references? Can you provide a tenancy agreement? If you opt to use an agency most of these factors are taken care of although you will be charged a fee.

Location

Again, consider your target tenant, this will help when setting a realistic rental income. Student, professional couple or families? Each will have different priorities; parking for two working professionals with good transport links for example. Good schools, nearby amenities and a pleasant location will appeal to most families.

If finding the right property, in the right location, at the right price without the hassle appeals then look no further. NM Finance work closely with several leading developers and property specialists who proactively source select property investments.

The partnership identifies the growth potential of up and coming locations nationwide and looks for investment properties that will deliver above average rental yields. Bulk property purchases are a speciality which offer greatly discounted prices that NM Finance pass on to their clients.

If you would like to know more about the opportunities available, call 01603 258268 or email enquiries@nmfinance.co.uk
NM Finance are authorised and regulated by the Financial Conduct Authority in respect of mortgage and insurance mediation activities. Their FCA register no. is 305324. Licensed Credit Broker No. 503720. Your home may be repossessed if you do not keep up your repayments on your mortgage.

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