General (main property discussion here) - What does a buy-to-letter look for in an investment?

Hi – New to this so please bear with me…

I’m thinking about selling a property which is currently let. It’s a 3-bed semi in Farnborough, Hampshire. An ideal result would be selling the place with the tenants in. But…

Based on what a house across the road is being advertised for (it’s a different type of house, but at least it’s a staring point), and the current rental income, it’s yielding 3.72%.

I bought it a few years ago (not as a buy-to-let as I lived in it for a while) so the yield has never really been something I worried about. (All I wanted was to cover the mortgage and have a little bit left on top).

Would the yield put potential buy-to-letters off? What else does a buy-to-letter consider when making an investment?

At this stage I’m just trying to get a feel what my options are. Not being an experienced buy-to-letter I’d really appreciate some feedback from those who are (!).

Cheers,

Paul

much depends on the market value and the price you want for the house.

most BTL forums I visit are looking at deals where the property is available at 15% -20% below market value

this allows the buyer to get a btl mortgage of 80-85%

I have spoken to two dealers in the last week who have stated that the most they would pay is 80% of market value, it didnt matter what value I put on the house, they would only work on 80% of valuation that they arrange.

Cheers Bill.

So if the dealers/buyers own valuation comes in lower than expected, and they then say they'll only pay 80%, an offer could be a lot lower than the sellers perceived market value...

I guess any property being sold is really only ultimately worth what someone is willing to pay for it.

Larger investors who have capital to invest may well look at a property at full market value, but this would have to show a good yield...

your example shows 3.72%, but most investors would be able to get higher deals from their bank e.g HSBC High Interest Bond pays 4.65%.

Personally I would be looking for 10% at nmedium risk and 15-20%+ for higher risk

I have never really considered yields! i currently own 9 properties and i only ever look at whether it is affordable. in todays market(if buying now) i dont see how you can seriously expect to make any money from renting well not if you have an 85% mortgage, you might just perhaps cover your costs. well either that or i'm doing it all wrong!!... blinking hope not! I think that most investors Paul are looking for long term capital gain. Lou