What is buy to let?

Buy to let involves purchasing property with the specific intention of renting it out to tenants. The UK buy to let market is booming – worth at least £30b – and this form of property investment is an increasingly popular alternative to more traditional pension schemes. Buy to Let landlords own an average of 7 properties but don’t let that put you off – if you already own your house and provided you do your homework carefully, there’s no reason why you can’t join the growing band of buy to let property owners.

DO YOUR HOMEWORK – According to figures published by Hometrack, average residential values in October 2006 were 4.9% higher than a year ago – the fastest year on year rate for over two years. Average growth in London is even higher – close to 12% for 2006. If you're keen to maximise profits, it's tempting to join the thousands of landlords letting properties in London and the South East.  Plenty of towns outside the Home Counties offer reliable rental returns, the North West is one such example, with only 11% of housing being privately rented yet with 23% of the workforce aged 18-30, it's an ideal spot for buy to let.  What you are looking for is a large, young working population and a shortage of rental accommodation.

FEW TIPS FOR PICKING A GOOD INVESTMENT PROPERTY

• Look for a property which requires little maintenance. A big garden might seem attractive but it's unlikely to increase the rental value.



• Focus on the needs of your target market, but also look out for benefits that will appeal to all tenants, like nearby shops and easy access to public transport.



• Naff decor can give you bargaining power when it comes to buying a property, and it often costs relatively little to put right.



• When it comes to major, structural issues, however, stay well clear, and always get a full survey before you buy.