Buying a second property with the idea of letting it can benefit you in two major ways. The first of course is that if you have done your homework correctly then it can bring in a substantial income. The second is that there is a long-term accumulation of capital growth associated with them.
However, when it comes to taking out a second property mortgage there are many pitfalls that you can come across, and you need to have some knowledge on the subject if you are to avoid stumbling into one of them.
Second property mortgages generally aren’t as simple to arrange as the normal first mortgage and many factors have to be given some serious consideration if you are to get off on the right footing. While you can search for and deal with your second property mortgage yourself, this isn’t the advisable way to go or the best. The best way to go is by choosing a specialist broker, this ensures that you will get the best deal that is currently available as the broker does all the hard work of searching for you.
However, you should also bear in mind that buying a second property with the intention of turning it into an income is not easy. When you consider this option it is often far riskier than other investments, it can be very time-consuming and is complicated even with the help of a mortgage broker. But on saying this it can be a very rewarding experience financially over the long term, providing you are willing to wait to start reaping the benefits.
When taking out a second property mortgage one of the biggest considerations that you will have to take into account is your primary objective for the property. When it comes to letting the property you will have to know if the main objective is for capital growth or income. In plain English, this means are you seeking to get an income on a month-to-month basis or looking to gain from increased equity over a period of time?
You should have course taken into consideration the fact that besides the monthly mortgage repayments you will also have other outgoings to pay, additional costs include the upkeep of the property, legal insurance, and insurance such as contents and building and replacing furnishings and appliances.
As you can see owning a second property to gain an income is complex and this is more than enough reason why you should choose a specialist broker to take care of the mortgage part of the venture.