How to build a buy-to-let portfolio in 2023
Nicky Lloyd, ESPC’s Head of Lettings, shares advice on the process of buying rental properties.
Ready to purchase a buy-to-let home this year? Here’s what you should consider when building your property portfolio.
Think about your mortgage
Lenders usually base how much you can borrow on how much rent you will charge, rather than your current salary. This requires planning and research to make sure your rental income will cover your mortgage repayments and any additional expenses, such as insurance and building management fees.
ESPC Lettings can help you build and develop your portfolio with continued buy-to-let advice and regularly review your portfolio's performance to ensure you are getting the best return.
Consider the area
If you’re considering investing in a buy-to-let property, the location is one of the most factors to consider. The location can often determine the type of tenant you will attract as well as be an indication on how quickly the property may let.
We found one-bedroom properties in the EH12 postcode performed best during the third quarter of 2022, offering the highest yield and quickest time to let. EH12 is located to the west of the city centre, and covers neighbourhoods such as Corstorphine, Murrayfield, Hermiston and Saughtonhall and offers a variety of homes suited to students, young professionals working in the city and families looking for a home close to good schools.
Keep up with changes to legislation
There are many responsibilities that landlords need to be aware of, especially when it comes to laws and regulations. For instance, on 16 December 2022, the Additional Dwelling Supplement (ADS) charge increased from 4% to 6%. The ADS is an additional surcharge that applies to most second home purchases in addition to the Land and Buildings Transaction Tax (LBTT). This means if you are buying a residential property and you already own a home, you will need to pay the 6% ADS charge. If you are planning to sell your original property, you can claim the ADS amount back provided you sell within 18 months.
ESPC Lettings
ESPC Lettings is a letting agent based in Edinburgh. If you're interested in entering the buy-to-let market, the team can offer expert advice on your buy-to-let properties and portfolio and also provide a fully managed letting service for landlords. Get in touch with the team on landlord@espc.com or 0131 253 2847 to find out more.
ESPC magazine
This article appeared in the January 2023 issue of the ESPC magazine. Find out more about the ESPC magazine and read the latest issue online.