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Buy-to-let is still an enticing option if you want to purchase a second home, or grow a property portfolio, and rent your property out to tenants. Perhaps you鈥檝e become an accidental landlord and decide to garner a rental income from your property with the hope that its value appreciates over time. Buy-to-let isn鈥檛 without risks. It鈥檚 certainly not a quick win. It can, however, be a good long term investment strategy.

Navigating the complexities of the property market may seem daunting for newcomers. But with specialist advice and guidance, you can make a positive property investment that generates a decent rental income. This guide will take you through the process, and it鈥檒l help you to make informed decisions.

Our step-by-step guide to buy-to-let investments

 1.    Researching and setting investment goals

It鈥檚 really important that you do your research to make informed decisions. It pays to take your time thinking about what you want and how you鈥檒l achieve it. Are you looking to establish a multi-property portfolio or planning to buy a single property to provide an alternative income stream? Perhaps you鈥檝e inherited a property or are combining homes with a partner. Determining your investment goals will clarify the next steps of this process. Buy-to-let can meet any one of those financial aspirations, but it鈥檚 vital that you conduct your due diligence before jumping into a property search.

Start assessing the local property market (or whichever area you鈥檙e considering). Understanding the property market and current trends will help you to identify your best investment opportunities.

2.    Financing the investment

Any investor knows that you need to understand your numbers. Set your property budget and then choose the right financing option. Is your goal to earn a regular rental income or achieve capital growth, for example? Getting your finances right at the outset will maximise the returns on your investment in the following years.

There are various open to buy-to-let property owners. The starting point is how you鈥檒l pay for the property - personal savings, , loan or through a company. There鈥檚 no 鈥榦ne size fits all鈥� mortgage either - buy-to-let or residential; interest only or repayment for example.   provides a personal broker service and can find you the right mortgage, no matter how complex your requirements.

Generally, lenders apply a calculation based on the annual rent for your property and the . The rental income must exceed the cost of the mortgage, by between 125% and 145%. They want to be sure that you can pay the mortgage if the property鈥檚 empty between tenants. They鈥檒l also factor in whether you or a company own the property.

Don鈥檛 forget that there are additional costs on top of the price of a property. There鈥檚 Stamp Duty, legal and broker fees, valuation fees and more, as well as taxes.

It鈥檚 a complicated business - one that鈥檚 seen vast changes over the past 20 years. We highly recommended consulting an expert in this field to get that鈥檚 tailored to your individual situation.

3.    Choosing your property

Once you have financing sorted, search for properties that meet your investment criteria. Work out your potential rental yield too. That鈥檚 the rental income you鈥檇 get expressed as a percentage of the property鈥檚 value.

Who鈥檚 your ideal tenant? Figure out if you want to rent to families, corporates, students or local individuals. Each of these will have different needs and preferences. Families are likely to want good local schools, parks and facilities nearby. Corporate clients will want a proximity to transport links and their workplace. Similarly, students will want to be near their educational establishment as well as transport links, shops and entertainment.

When choosing your property, have that ideal tenant in mind. It鈥檚 important that it meets their criteria as well as your own.

To attract that ideal client, it can pay to present your property in the most appealing way. offer world class design and furnishings and will style your space exquisitely to maximise its appeal to potential tenants.

4.    Understanding your legal and tax obligations

It鈥檚 not only about rental income. Landlords have outgoings, tax obligations and legal responsibilities too.

Tax: you鈥檒l be taxed on your rental income. The rate depends on your tax band. When you sell the property, you鈥檒l need to pay Capital Gains Tax.

Compliance: your property must meet current regulations including gas, electrical and fire safety. You must fit smoke and carbon monoxide alarms, curtains and blinds. If you include furniture, it must meet fire safety standards.

Legal: you鈥檒l need a tenancy contract (usually an assured shorthold tenancy agreement), deposit protection scheme and to undertake right to rent checks.

Ongoing, you need to maintain the property to a decent standard and ensure it鈥檚 at an appropriate energy efficiency level. Then there鈥檒l be admin, regular checks and repairs. And don鈥檛 forget too.

5. Managing the property

Financing and purchasing the property is only the start of buying to let.. Finding and screening appropriate tenants, managing the paperwork and payments, and collecting rent each month can be time-consuming. You鈥檒l need to be available to deal with your tenant鈥檚 questions, concerns and demands ongoing.

Many people prefer to outsource their property management. Letting your property with an agent can take a weight off your shoulders. You鈥檒l regain valuable time as well as peace of mind.

Our lettings experts can guide you through the rental process. From finding your ideal tenant and rental income to responding to the day-to-day demands of your property, our experienced team will manage your property with care.

Take your next step towards becoming a landlord with our help

This step-by-step guide outlines what鈥檚 involved in buying to let and becoming a landlord. It鈥檚 a lot to think about and consider.

You don鈥檛 have to go it alone. We鈥檙e here to help. Our rental specialists bring a wealth of experience in managing a diverse range of properties. You鈥檒l have a single point of contact who鈥檒l get to know you, your property and ultimately, your tenant. They鈥檒l simplify this complicated process for you, advising and supporting you along the way. Talk to one of our expert team about your property needs, or subscribe to our landlord newsletter for monthly updates.