What are the top tips on how to protect your buy-to-let investment?
Follow these top tips to keep your buy-to-let investment on track
- Keep paying your mortgage When borrowers hit financial problems they can he tempted to stop making their payments. With a mortgage on your home a lender may come to some arrangement to help out. But with an investment property some lenders will start repossession proceedings more rapidly if you miss payments.
- Take cover You might want to consider taking out insurance against rental voids. in order to keep your repayments covered if you are between tenants.
- Make overpayments Overpaying can save you thousands of pounds in future interest payments and give you far more choice of lenders and products to re-mortgage to in future.
- Keep an eye on the market Consider locking into a competitively-priced fixed rate, which could help optimise your wider budgeting. give you peace of mind and protect against future interest rate rises. A professional broker could find you the best deal.
- Stay up to date Regularly check industry (e.g. NLA or Landlords property Club) and Government websites to monitor proposed or actual changes to benefits, regulations or selective licensing for example.
- Improve your property Investing any spare cash in updating. decorating or adding attractive features to your property could help you to attract or keep longer-term tenants.
- Avoid paying penalty fees Many buy-to-let lenders, are trying to encourage landlords to adopt better and more efficient practices when running their accounts. by insisting that you make your mortgage repayments via Direct Debit. rather than cash. cheque or credit/ debit card. They will charge you a penalty each month for not using a direct debit, so make sure you set one up.
- Be approachable It makes sense to keep the lines of communication open with your tenants. so they are more likely to stay and also to let you know in advance of any financial/ employment problems. By the same token, you should be approachable to your lender and comply promptly with reasonable requests for updates or information.
- Have an exit strategy in place You need a short- medium- and long-term plan including knowing how you intend to pay off any interest-only buy-to-let mortgages.
- Sell up if necessary While selling may not have been part of your original plan. there could come a time when it makes sense to crystallise your gains or cut your losses. if one or more properties are performing poorly. they could be sold and be replaced with another property. or with a different type of investment for example.