How to Avoid the Pitfalls in Buy to Let Investment Deals

Buy to let investment deals are abundant throughout the UK. So much so that financial advisers are once again recommending investors with a long-term vision consider property investments. However, no investment is without its risks. There are plenty of pitfalls associated with buy to let property.

Avoiding the pitfalls of buy to let investment starts by knowing what those pitfalls are. They are numerous and potentially costly, so be sure to do proper research before making an investment.

Top Three Pitfalls

In order to enjoy high yield from buy to let, UK investors need to be very careful about purchase prices. Herein is the first pitfall of this sort of investment.

Investing in property is a long-term strategy enabling you to put some money in your pocket month-to-month, with the goal of increasing that amount as the years go by. When a property is fully paid for, it's nearly all profit. Nevertheless, in order for this strategy to work out, you cannot pay too much for your property. This means you need to be aware of:

  • local rental rates
  • local property values
  • desirability of your property.

The second pitfall many new investors fall victim to is the cost of rehabilitation and renovation. In order to get the best bargains you are likely going to have to look at repossession and distressed properties. However, these properties may be in need of significant work due to neglect, vandalism, and normal wear and tear.

Third is the area of financing. Cash investors need to make sure they do not spread themselves so thin that they have no cash left over for upkeep and maintenance of properties. Those looking at financing have to be careful not to over extend. Keep in mind that cash flow interruptions are common with rental property.

Other Pitfalls

There are certainly other pitfalls with buy to let investment properties. They come in many forms including limited documentation, legal issues, uncooperative sellers, local property codes and so on. Avoiding these pitfalls is made easier when the investor adds a property agent, experienced conveyancer, and a reputable contractor to his/her team.

Part-time investors will not hire team members as direct employees. Rather, they will work with them as contractors. However, there are pitfalls in these relationships as well.

You can avoid these pitfalls by always checking the reputation of the agencies or companies you want to work with. Ask for references, check with trade groups, and do Internet searches before you enter into an agreement. Just like poor property choices can ruin your investment, so can lousy relationships with your partners.

As for your agency partner, Fruitful Property welcomes the opportunity to work with you. Over the years, we have provided our clients with the best investment properties available. How do we do it? By investing our own time and financial resources enquiring and researching the best buy to let investment property. Because we spend our own money on research, we are just as motivated to succeed as you are.

In addition to locating the best investments for you, Fruitful Property can also help you develop sound investment strategies and appropriate risk management. If you are ready to start earning the highest yields on your investments, let us help you invest in rental property.


Jonathan Caplan

by Jonathan Caplan - Property developer, investor and Fruitful founding Director.

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