All landlords want to know how to make the most of their property investment and make it as profitable as possible.
But keeping costs low can be difficult, with various fees to pay and continuous maintenance. Then you must factor in void periods and accidental damage, and your finances can soon be stretched too far.
However, a mortgage is generally a landlord’s biggest cost. But many investors forget about mortgages once they’ve secured a deal. It is advised that you check rates annually, even if you’re in a fixed rate term.
But what else can you do to secure your finances and make the most of your property?
The buy-to-let industry is as busy as ever, with the private rental sector continuously growing. As such, mortgage lenders are introducing competitive deals to entice new and existing investors. And some providers are now offering buy-to-let loans for the first time.
But landlords too are noticing the importance of refinancing. Finding a better deal and remortgaging while interest rates are low can stop you getting hit when they rise, which is expected early next year.
Don’t just go for the cheapest
We’re all swayed by super-low rates, but the right mortgage for you may not necessarily be the cheapest.
If you are looking for capital growth, a mortgage with a high loan-to-value (LTV) is ideal, but it could cut your yields. If you’re aiming for a good income, a low mortgage rate will boost your earnings.
Typically, buy-to-let mortgages are more expensive than homeowner rates, but you can find a deal that suits your business plan and delivers the results you’re aiming for.
Have you considered building societies? Recently, they have become much more competitive, with low rates and flat arrangement fees. Some mortgage lenders have such high fees that going elsewhere may make your loan much cheaper.
However, it is important to remember that some providers have a limit on how many properties they can cover. Also be aware that some products include penalties for remortgaging.
It is not just rates that you should look into – some mortgage providers refuse to finance certain property types. These include ex-council houses, homes with more than five floors and flats above shops.
Aside from asking if your property type is covered, always ensure that you have thought about the future and what rates are likely to do. Organise your finances based on the market now and how it will be in a few years’ time.
For the latest news on the property market and landlord finances, go over to LandlordNews.co.uk.