When looking at buy to let investments, what is an acceptable gap between finance costs and rental income? I would be interested to see some practical examples where possible.
Disagree strongly that property investment changes quickly. It is long term and stable compared to other asset classes. Your income stream from existing tenants can change very quickly, but fundamentally the market rental rate has never yet gone straight to zero, unlike my shares in Northern Rock. Housing is one of the 3 necessities that all of us have and are prepared to pay for. In the spirit of the current season, I believe Mary and Joseph had problems securing a roof over their head even though they were prepared to payIt probably makes sense to review your "headroom" on an annual basis just to make sure you have enough insurance in reserve. Remember, property investment is fluid and can change fairly quickly.
Personally the problem has never been knowing the OMR (Open Market rental) or indeed getting good response rates. We normally use Gumtree and the views are never less than 250 in our area. Responses are typically 40-60. Whittling it down to 3 is not so easy, and the final choice is made using our best judgement. Hot tubs are not an item I have ever dealt with. All items supplied by the landlord have to be maintained by the landlord. The 2 top questions asked by renters areDepends, Estimating the rental income can be tricky. Your rental has to be competitive with other rental properties in its market. Find out how much similar nearby properties are renting for and adjust for things that make your property more or less appealing to a prospective renter. For example, if your property has a hot tub for the renters' use, that might add to your rental income. Take into account neighborhood desirability, proximity to schools, parking -- anything that sets your property apart from others.
I am active.I have lived in rented accommodation when I was younger and was sent out on project work to other offices. In all my time I think I saw two bad tenants although in hindsight I think drugs might have been involved with at least one of them. Are you an active landlord or hands off?