How to save money on a buy to let property

If you are looking to make the most out of the boyant rental market by investing in a buy-to-let property then you may be looking for ways to make your investment go further by considering these money saving tips:

Research buy-to-let mortgages

Searching for a specialist buy-to-let mortgage will help you work out how much you can afford to spend on a rental property. The difference between a buy-to-let and residential mortgage is that a lender will take into account your prospective rent as a source of income and will usually ask for a higher deposit compared with a residential mortgage. This isn't to say a rental property is out of reach, falling house prices mean that there are some very reasonably priced rental opportunities out there that could return great rental rates. To compare the best Buy to let mortgages deals visit Moneysupermarket or Knowyourmoney.

Find the right location

Looking for the right rental property is different to looking for a residential home, speak to a local lettings agent for their advice on local rental 'hot spots' and purchase prices. You will need to find the balance between finding a cheap property and a property that will generate a high rental charge. The best rental properties are often those within walking distance of ammenties such as transport links, Universities/Colleges and business parks. A good starting point for you research is to use our House Prices tool to find recent sold properties in a specific area, this will give you a good indication of the streets/roads that are selling properties for reasonable prices.

Shop around

As with residential properties shopping around for the best deals on conveyancing and insurance can save you hunderds of pounds. Specialist landlord insurance is a must for your property as it will protect the rent itself and any damage that is done to the property during periods of tenancy. Moneysupermarket lists the insurance providers offering Landlord's Insurance so you can compare the deals and tailor them to your requirements.

Save on stamp duty

If you buy a property for less than £125,000 you will avoid having to pay stamp duty, which is currently 1% on property's sold for between £125,000 and £150,000, saving you between £1,250 and £1,500.

Save on contractor fees

As a landlord you are legally required to obtain gas safety and energy performance certificates (EPC) for your rental property. If you do buy an investment property with the intention of renting it out you should see advice from a specialist landlord agency who may be able to negotiate lower fees with these contractors.

Renovation

If you buy a property that needs re-decorating it is best to leave this until you have a potential tenant to prevent wasting time and money decorating the property only for it to be stripped down and painted over if it doesnt suit your tenant's taste.

If the property needs cosmetic improvement before you advertise it then just plastering and painting in a neutral colour will make a huge difference.