Getting into buy-to-let - Tiscali Property

- Compare quotes for buy-to-let mortgages

Investing in a buy-to-let property has become more and more popular in recent years as people look to make money from the rising property market, rather than putting their spare money in the bank.

Programmes like Channel 4's Property Ladder have caught people's imagination, with first-time property developers being shown how to turn properties into money-making rentals.

If you're thinking of getting into buy-to-let there are two broad approaches you could take:

1) Invest in one or two properties as a form of pension fund. You're investing for the long run, you want the rental to cover the cost of the mortgage and other running fees, and eventually when the mortgage is paid off you have a fully-paid up property to help fund your old age. It's a long-term investment with rental payments covering the mortgage costs. Once the mortgage is fully paid off, you have the full value if the property to help fund your old age.

2) Look to build a portfolio of properties to provide regular income. This approach is a lot more hands-on, and can for some be a full-time occupation. You'll likely go for interest-only mortgages and need a close working relationship with whoever is providing your mortgages. Click here on tips for building a portfolio.

If you're thinking about getting into buy-to-let there are some golden rules that you need to think about upfront:

How many properties can you cope with? There's always something to be done when you're renting out properties. Even if you get an agent to handle things for you, there'll be the mortgage and insurance to sort out on a regular basis. So think about how much time you can allocate out of your week to manage your mini buy-to-let empire.

Know your area It's quite fashionable in buy-to-let to look for the area in the UK, or even outside the UK, that has fast rising property prices. However, the nearer the area to your home town the more you'll naturally know about the area. Also, obvious though this sounds, you want to be at least within driving distance in case of emergencies.

Know your market! Who do you want to rent to? If your target area has a high student population a terraced house with cheap but sufficient fixtures and fittings is a popular option. If you want to buy a plush new purpose-built apartment the best target group is likely to be young professional couples.

Sort out the numbers You're going to need a specific type of mortgage, known as a Buy-to-Let Mortgage. Most Buy-to-Let Mortgages require at least a 20% deposit, which is quite a lot higher than the deposit required for normal mortgages. There are a lot of providers offering different buy-to-Let Mortgages. To compare some of the best offers click here.

You'll also need landlord insurance - you cannot just use normal home insurance for a property that you're renting out. Click here for more information on insuring your buy-to-let.

Simply Business helps you compare buy-to-let mortgages. Just fill in the simple-to-use forms to compare rates and terms between leading High St lenders.

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