December 1, 2021
Matthew Fairy

Buy to Let Investment

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How to Choose a Buy-to-Let Property

Our tips will help you make the right choices regarding your investment

When it comes to looking for a buy-to-let property to invest in, your requirements and budget will differ to when you are looking for a property of your own. At each stage of the process there will be differences you need to consider:

Your Budget

Before the search for your property begins you need to decide on a price range that suits your budget. This will depend on how much you have saved as a deposit and also how much a mortgage provider has agreed to lend you. You should try to have a deposit of 25% or more of the properties value as buy-to-let mortgages tend to require a larger deposit compared to a standard residential mortgage. The amount your mortgage provider will agree to lend you will be based on a variety of factors. One of these being, the expected monthly rent you will charge for the property. This needs to be at least 25% to 45% higher then the cost of your monthly mortgage payments.

Your Tenant

Different properties will appeal to different tenants, making this an important factor to consider before you choose your property. You need a clear idea of the type of tenant you wish to attract. For example, if you would like student tenants then you need to ensure the property is within an affordable location, as well as being close to a university campus. Or, you may be looking for professionals. A built-up, busy student area would not be an ideal location. You also need to consider the rental market in the town or city you plan to buy in. It could cater more to commuters and families or be a city centre of young professionals.

Features of your Property

Create a detailed list of the features you require for your property, here are some examples of what you should consider:

- Would you like it to be a house or a flat?

- Does the rental property need a garden?

- Will the tenant require space for parking a vehicle?

- Is your tenant going to want any particular facilities nearby?

- What type of property would be more appealing to your ideal tenants? A period property or a new build?

- How big does the property need to be? How many bedrooms and bathrooms?

- How much can your target tenants afford to pay in rent?

When it comes to your list of criteria remember to have some flexibility. Of course your list will include some must haves, but it is also important to include some negotiable features that are not completely essential.

Your Property

You need to find the right property to invest in. For landlords in the buy-to-let market, the ideal investment into a house or flat will be one that is relatively cheap to buy and mortgage but give good rental payments in comparison. To gather this kind of information use local estate agents who can advice you on the local housing market and demographics. Take a look at house price indexes too - these are helpful to identify properties that give long-term investment potential. You should also carry out some independent research, use online resources and social media to understand the local community you could be buying in.

Is it a Sensible Investment?

When you are looking to buy-to-let you want to aim for a rental yield of at least 5% to ensure you are making a sensible investment. A rental yield is the percentage of return on your investment that you receive through rental income. It tells you how much money you will make on your investment.

Once you have followed all of our buy-to-let tips you should be ready to make the exciting step of putting in an offer on your investment property. Good luck!

For more professional mortgage advice Transparent Mortgage Services are here to help! Contact our friendly team on 01424 444 597 or email us at

Transparent Mortgage Services is authorised and regulated by the Financial Conduct Authority (FCA).

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