by Robert Jones, Property Investments UK
It’s no secret that investing in property involves a lot of money. Beyond what’s needed to initially buy and maybe redevelop the property itself, managing a buy-to-let is going to require the ongoing budgetary management of rents and expenses, as well as a rainy-day fund, to cover unexpected events such as tenant void periods or sudden maintenance costs.
Cash flow, as they say, is king, which is why property investors should concentrate, first and foremost, on rental yield, when they are researching where to invest. We all want to see the value of our investments grow in value but no one wants to run out of money and have to sell early as a result.
Here, we’re going to look at all the costs involved in buy-to-let and perhaps, where money can be saved and cash-flow maximised. Before getting into it, I should point out that this article is written with standard buy-to-lets (such as a family or shared house) in mind, rather than say a unit in a new-build tower block. The reason I make this distinction is that with new-build units, tenant management, marketing and basic maintenance, often come as standard, so there is less that can be said about them.
I’m also not going to talk about mortgages or insurance. Of course, the mortgage deal you get is important and will impact your cash flow but any advice I could give on this subject would be vastly inferior to the advice of a good mortgage broker, so I strongly suggest you seek one out before moving forward. Insurance is another issue, where you need it of course but any advice I could give would be beyond the scope of this article.