Buying to let for the first time - what do I need to know?

[33goingon64]

Both parents died, about to get a cheque for just shy of £400k. I'm aware it's a lot of money and I want to invest wisely. The most obvious option seems to be buying a property to let. The steps I can image I need to take are:

Research what I can get for my money - and whether it will appeal to renters
Research areas that are 'up and coming'
Decide how much work I'm willing to do and how hands on I want to be
How far away it needs to be from where I live (linked to above)
What rent I could charge
What are agency fees and what should I look out for when choosing an agent?
Are there rules about buying to let if I don't need a mortgage?
What kind of level of tax do I pay on rental income?

Anything else?

If anyone is a seasoned property investor and has tips to share I'd be very grateful!

If you can,lend to someone with a financial services job. Best type of insurance as they lose their license if they dedault

You think she should become a money lender?

Just no. There are so many more tax efficient, less risky and more sensible places to put your money. Why the fuck would she do this?

I meant rent not lend. Apologies

I've been a landlord for a while after a work move and currently live in rented. Be prepared for extra costs to cover in addition to the set up and annual costs. So far our landlord, in the first year of the tenancy, has had to spend £2k on a replacement oven, get the garage door mended and then pay for multiple plumbers to come and fix a leak through the ceiling. I imagine some years the house would need little doing to it but there are no guarantees!

Sorry for your loss.

Be aware of licensing areas - some areas of the country have LL licensing schemes which add an extra cost on. The cost of the license is thousands and then you have periodic inspections by the LA who can ask you to make changes they see fit.

Speak to an IFA, they will assess your financial position, risk appetite, retirement options, whether you can invest short, medium, long term. They will recommend the best investments for you, and minimise tax liability.
BTL is major hassle, especially for a novice.

I'd get an IFA initially as some low risk funds could give you nice returns.

At the level as you are talking about returns are likely to be very poor unless you buy something that you can add significant value to.

• Tax is something you must look at, with section 24 it's eye watering.

• exit plan needs to be considered.

Equally if it's for the long term & you are happy to park cash it could be a good option.

Make sure you are happy to deal with tenant issues. Even if you have it fully managed I have friends to simply can't cope with the hassle and they've ended up offloading properties cheaply when things get too much.

I've been a landlord.

It's shit- a bad tenant can cost you money and it's hard work being a decent landlord.

Invest your money elsewhere. We don't need more amateur landlords

Or just buy this book for £25

www.amazon.co.uk/s?k=the+permanent+portfolio+harry+browne%27s+long-term+investment+strategy&crid=1MKXZ55R3CLVZ&sprefix=harry+browne%2Caps%2C77&ref=nb_sb_ss_ts-doa-p_3_12

I really wouldn’t just buy a book! Not up to date info and not a conversation! You always need a conversation.

A book can give you some very valuable conversation starters for things like where your attitude to risk lies. But would use it in addition to an independent financial advisor, not instead of

Yes, if you are uncertain how to operate a stocks and shares ISA and locate the various funds then go ahead and use an IFA, but it really isn't necessary if you have a little confidence and understanding.

The secret to successful portfolio management is to minimise costs and that especially includes the fees that an IFA will charge.

Op I’m in a similar position as you and originally intended to do the same ( I’ve had a buy to let before - about 15 years ago ) .. there are plenty of good interest rate deals on savings out there at the moment and I’ve chosen to put most of my inheritance away for 12 months and earn the interest . There is no rush

£400,000 self invested is quite a risk. We have always had advice and we don’t have the time for diY. We have a fairly substantial portfolio and I’m definitely not doing diY after reading an out of date book! Any adviser will explain risk! Level 6 invested Uk start ups is the riskiest category for us - our IFA rates risk from 1-6 with clear explanations. But 6 UK Start Ups is IHT free.

Be careful when signing up to lettings agents. Some seem to know barely anything about the law and do the absolute minimum for their fee each month. Read the contract small print carefully as some will charge additional fees on top of their monthly fees for things like contract renewal (which in effect takes about ten minutes for them to sort). Join local groups to get recommendations, don't assume the large letting agents are the best either.

That said, if you know absolutely nothing, it's better that you have support than try to go it alone. Landlording is way harder than it used to be, courts seem actively opposed to honouring legislation such as S21 and that's even if you can get court time due to backlogs. It's entirely possible to be stuck with a non-paying tenant for months on end.

I'd echo the above. When I rented out my house after relocating for work I used a local letting agent who had been recommended by someone who rented via her as being very fair with charges etc. I wanted someone who would look after my house and tenant, had the contacts to sort any problems speedily and wouldn't mess with me or the tenant around.

I've rented myself via two of the bigger chains, including a more expensive one, and they've been AWFUL. Poor communication, only interested in how much money they can get out of you (and presumably the landlord), leave you hanging for ages about repairs and require lots of chasing up. The one we're currently using failed to tell us the tenancy would automatically move to a rolling periodic tenancy at the end of our fixed term and attempted to get us to sign up for another fixed term, which they'd have then charged for. Luckily I knew about the Shelter website...