I was sent a tweet the other day asking me what my advice for first time landlords would be. Obviously, I replied, slightly tongue in check, saying my advice would be don’t do it and to invest in the Somerset Estates REIT instead!

Several tax and regulations changes over the past few years are making it harder and harder to make a success of investing in buy to let property. However, if you are determined to take your first steps into the buy to let world here are my “TTs Top Tips”:

TT’s Tip Number 1:

Why do you want to become a landlord?

It is important to figure out what your expectations are from investing in property. Are you looking for a monthly income? Or are you investing for your pension and hoping to benefit from house price rises? Are you hoping to escape the rat race and start working for yourself? Have you seen friends and colleagues make money from property and want a piece of the action?

Figuring this out will determine your investment strategy.

TT’s Tip Number 2:

Know your budget

Work out what you can afford before you start looking at any properties. Get as much money together as possible, beg and borrow from friends and family if necessary. Speak to your bank to see who much you can borrow. There are some specialist buy to let lenders who are worth getting in touch with (http://www.3-mc.com/lender-types/buy-to-let/). Work out your purchase costs early (stamp duty, legal fees, mortgage fees etc.) this way you will as prepared as possible.

With the Section 24 tax changes it is more important than ever to keep the amount you borrow to as little as possible. Once the Section 24 tax changes are fully implemented in 2021 any mortgage over around 60% Loan To Value is likely to have a significant impact on your income.

TT’s Tip Number 3:

Research Research Research!

Researching potential property investments has never been easier. There are several websites which give sold prices and expected rents. I believe the most important things to research are:

  • Location – It is important to invest in a location that you know well. Therefore, the ideal location for a first-time landlord is within 20 minutes of where you live. This will obviously be a location that you know well and will make managing the property much easier. Those 2am visits to repair a leak or broken boiler will not feel so bad if you only have to drive a few miles! Make sure you walk the streets and spend some time in your selected area to get a feel for the location, imagine you are a tenant looking to move to the area for the first time.
  • Type of tenants – Try and figure out your target tenant. If you are looking to invest in a student property, then obviously it needs to be near a university (more than likely a pub as well!). If you are looking to target professional tenants, then transport links will be key and a better quality of accommodation if likely to be important as well. Targeting the wrong types of tenants for your property could end up costing you thousands in unnecessary fixtures and fittings.
  • Yield is key! – Before investing your hard-earned cash research what yield you can expect from the property (http://www.thisismoney.co.uk/money/buytolet/article-2991821/Buy-let-yield-calculator.html). As a minimum the gross rental yield should be around 4%, this does not include any capital growth. I do not advise to expect any capital growth, especially at the moment, therefore all your sums should be based upon the rental income which is more tangible.
  • Speak to local agents – Local estate agents are a treasure trove of knowledge on their market. They will be able to advise you what types of properties achieve the greatest demand, what sort of rents you can achieve and how long it might take for a property to let. They will be hoping for your business, so this advice should be free!
  • Regulations – It is more important than ever to research what regulations your property will be subjected to. For example, the EPC minimum requirement was implemented in April 2018 and it is now a requirement for landlords to make Right to Rent checks on their tenants. To make it even more complicated, different Councils have differing regulations. For example, Thanet Council in Kent introduced Selective Licensing for landlords in a specific area within Margate.

Failure to adhere to the ever-increasing regulations on rented properties could lead to a large fine or even prison in extreme cases.

There are a wide variety of resources to help you carry out the required research. The National Landlords Association (https://www.landlords.org.uk/) and the Residential Landlords Association (https://www.rla.org.uk/) are treasure troves of information for all landlords.

TT’s Tip Number 4:


It is important to figure out if you want to manage your property yourself or are you happy to instruct an agent to do this on your behalf? Managing agents take the stress away but will charge up to 15% of the rent. If you are happy to deal with all the potential hassles that come with managing a buy to let property yourself then you will be able to increase your income, but obviously be wary of those 2am calls from your tenants saying there is a leak or the boiler has stopped working!

TT’s Tip Number 5:

To be honest my best advice is to simply invest in Somerset Estates REIT and receive a property income but without all the hassle!