1. Know what’s involved in buy-to-let, Scotland
Knowing what’s involved in the buying and renting of buy-to-let (BTL) properties in Scotland is the best first step in any investment, both for new landlords and for those who are more experienced with the market.
Knowing the ins and outs of letting a property means being prepared. It will help if you know the current guidelines and regulations you are required to meet, which includes aspects such as gas safety checks, service charges and certification required.
If you require any further information or want to discuss how we can help manage your properties, taking all these tasks off of your hands, get in touch.
2. Have your finances in order
BTL properties can be an excellent investment and generate a lot of income, but you need to make sure you’re in a stable enough position to make the initial investment.
If you’re unsure how your finances may affect you becoming a landlord, we recommend seeking financial guidance and learning more about the costs associated, such as solicitors fees, stamp duty, survey fees and property valuations.
3. Understand the local taxes for buying buy-to-let properties
While in England, stamp duty applies to properties that cost more than £125,000, in Scotland, you will be required to pay Land and Buildings Transaction Taxes.
Knowing the current tax rates can help you make a sound financial investment and are subject to change.
4. Find the right mortgage
Investing in a BTL property requires a specific type of mortgage in Scotland, which can often have higher rates than your typical residential mortgage. You should make sure you remain covered legally while finding the best mortgage for you and your investment.
5. Know the area
Prior research into an area can inform you of many things, including offering what there is to provide potential tenants, the average property prices, and the types of rental yield you can expect.
Knowing this information before investing can help you decide on the types of tenant to market and whether you are likely to receive the return you want.
6. Know your tenant
You can potentially be in a position to earn more monthly with proper research into what the area offers and who to market too; for example, do you want to rent to young professionals, families or students? These choices can impact aspects such as certification, furniture and the requirements you have as a landlord.
7. The Scottish Home Report
Before purchasing or investing in a BTL property, you should thoroughly read the seller’s Home Report to make sure you are well informed as to exactly what you’re buying. This report includes the Property Questionnaire, the Energy Report and the Single Survey, which all detail the necessary information concerning the property’s condition.
8. Landlord Insurance
As a landlord, you’ll need specialist insurance to cover the building and contents insurance to cover any furniture included. Make sure you shop around and look for the best deals, ensuring any options you choose meet all the requirements for you and your BTL property.
9. Landlord Registration
All landlords in Scotland are required to be registered before they can let out their property. You can learn more about registration with your local authorities.
10. Getting help? Make sure you check agency fees
If you’re planning on getting help with aspects of managing your BTL properties, make sure you find an agency that meets all your needs and offers reasonable fees for their services.
11. You can calculate your investment return
Rather than go in blind and hoping for a good return, you can calculate what you’ll receive.
Known as rental yields, you can work out the sum as a percentage of what you’ll need to invest for a specific property, so you can be more informed before spending any money.
12. You have to spend money to make money
With any BTL property, you need to make sure it is in a condition your tenants can live, as well as a condition potential tenants would want to live. Poor renovations and cheap furnishings may mean our property sits empty, earning you nothing.
This is why it can be a great idea to spend a little money upfront, fix any issues, and create a home you’d like to live in yourself. If your tenants are happy, you’ll be happier in the long run.