Buy to let mortgages. Are they right for you?

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So, what are the requirements of buying to let? Well, the main requirement of a buy to let mortgage is that the rent value of the property can cover costs of purchasing and maintaining ( loans ) the household. This can include mortgage payments, letting agency fees, building maintenance, building insurance, advertising, accountancy fees, management charges and any other associated costs. For example, licenses ( cheap life insurance ) will be required for houses with more than 3 stories and more than 5 occupants. In fact, a general requirement is that rent covers 130% of the mortgage payments.

For example, a £100,000 mortgage will require potential ( personal secured loans ) rent of £520 per month. This is calculated from an £80,000 mortgage (after a £20,000 deposit payment) with an assumed rate of 6%. This example would command mortgage payments of £400 per month, so add your 30% to this and you come to the previously stated £520 rent. This appears to be a fair assessment when you consider the possible periods of time without tenants on top of all the previously mentioned house costs.

Fortunately for you, Council Tax is the responsibility of the ( home insurance ) tenants once they are occupying the house. However, you will be responsible for a percentage of the area rate if the house is unoccupied for more than 6 months. This will be a smaller percentage if the house is unfurnished.