How to Set the Rental Amount for your Buy to Let Property

Most people who are thinking of investing in buy to let property research the amount of rent they can achieve before buying the property they’re interested in…but occasionally some don’t. If you have already done your research great, but if you haven’t then the following information may help you to get a good idea of how much rent you can charge for a particular property.

There are two ways of finding out the achievable rent for a buy to let property.

1. Use a buy to let calculator

 A buy to let calculator actually tells you the amount of rent you will need to charge in order to be approved for a buy to let mortgage…but this is in essence the same as the achievable rent. These simple to use calculators are available on most buy to let mortgage websites, and there is even one on this site.

In order to use a buy to let calculator you need to know the value of the property you intend to buy and the amount of deposit you can comfortably put down. So for example, let’s say you want to buy a £200,000 property and you have the minimum deposit amount of 25% or £50,000. By inputting these figures into a buy to let calculator you are given the rental figure of £750 per calendar month. This is a good starting point and is probably the best amount for the type of property, but it doesn’t mean to say you can’t charge more or less if you want to.

2. Visit the Rent Service website

The Rent Service is the authority on all things to do with private rentals and buy to let properties. Their website explains about what is called Fair Rent and gives the rental amounts that landlords can legally charge for a particular type of property. In simple terms though, Fair Rent is the rental amount determined to be fair for a property in the current local market conditions.

Most Fair Rent calculations provided by the Rent Service are capped and they can only be exceeded in cases where there is definite proof that the landlord has made valuable improvements to the property. So, using the £200,000 property mentioned above as an example, the Rent Service may say that a rent of between £700 and £800 is considered to be fair. This works out perfectly as according to the buy to let calculator you would need to achieve £750 to be approved for the mortgage. If however the Rent Service determined a rent of between £600 and £700 you would need to put down more money in the form of a deposit to secure the mortgage you need.

Although not entirely accurate a buy to let calculator can be used to give a good indication of the amount of rent you can achieve from a particular property. For a better, more accurate amount though you are advised to visit the Rent Service website.