Buy To Let / Let to Buy

A Buy to Let is where you purchase a property with the intent to rent it out rather then to live there.

Buying a property to let can benefit the private landlord in two ways. Firstly, it can provide a stream of income. Secondly, many Buy to Let landlords purchase property because of the potential for long term accumulation of capital growth.

A Let to Buy is exactly the same apart from that the property that you are currently living in will become the property to be rented out and the property you are purchasing will be your residence.

When applying for a Buy to Let or Let to Buy no income verification is generally required. You will however need to prove the rental being received from the property and this is what the lender will use to find your maximum borrowing. Every lender has slightly different ways of working this out. You will generally need to have 15% available as a deposit for the property and the interest rates are generally slightly higher then a residential mortgage.

Becoming a private landlord should not be seen as an easy way of making easy money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will continue to rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property's interest only mortgage repayments in order to cover your costs should anything go wrong.