Buy to let mortgages for the first time landlord

If you live in a university town such as Stafford, Bradford, Cambridge etc and you're looking to make a few investments, why not consider a buy to let mortgage? Not only will you be helping out the students in your city, you can also make money out of it!

A buy-to-let mortgage is designed for those who would like to invest, but don't trust the up-down nature of the stock market. A person can buy one or more properties and let them out to students, or other tenants, who then pay you the rent that pays off the mortgage.

BTL mortgages differ in small ways from a standard occupants mortgage. The interest rates tend to be higher, the terms can range from 5 to 45 years, and the borrowing limit is typically capped at 80%.

If you like the idea of being a landlord and investing in the property market, firstly decide what sort of tenants you'd want to attract and this will give you an idea of what type of property to look for. To use the earlier example, student accommodation is usually best in a building with 2 reception rooms and at least 2 bedrooms, a large kitchen and preferably two WC's (for obvious reasons!). If you can get a property with ample parking, so much the better. The more features a property has, the more rent you can expect.

In a university town there will be many student accommodation properties around, so try and contact a couple of the landlords to ask their advice about BTL mortgages and the rent they charge. With so many students you won't have to worry so much about competition as there's always demand for more and more 'digs'.

Remember that if you do purchase a student accommodation with a BTL mortgage there will be periods between tenants – such as the University holidays – where you will have to make the repayments yourself. When you look for mortgages, consider how much extra you could charge for rent to enable you to save some money to cover the empty periods.

As well as covering the repayments, the rent you charge needs to be enough to cover any repairs you may need to carry out, and also your landlords insurance. If you find a property which is structurally sound and in a good state of repair, the chances are that unless you get unlucky with your tenants, you won't need to do much on the building in the first few years. You will be responsible for any ongoing issues such as the boiler inspection, council tax, TV licences etc, so reflect these in your rent. This is where the larger properties have an advantage as they can take in more students.