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Buy to Let (Part one)

Buy to Let (Part one)
With all the hype on houses rising faster than ever, most people must be looking at investing in buy to let houses or industrial/shops. There are many things to consider.
Firstly yield
What is yield?
“Yield" is a way of expressing the income made on a property, relative to the amount of money invested in it. Smaller properties tend to have a higher yield than a larger property this is because of rental compared to purchase is higher than larger houses.
Yield is important because it is useless getting £1000 rent every month if your mortgage is £1500, so your rent should out way your mortgage by at least 1% every month.
The formula for calculating the net yield from your property is easy; it's the total amount of rent then deducts any running costs, divided by the total value invested in the property, including buying costs.
The big mistake most buy to let investors make is they do not include all the cost of running the property like insurances and they do not include the total purchase prices.

Include all your costs, below is what to allow for when buying an investment property

Mortgage fees
Survey (very important)
Legal costs (solicitors, land searches)
Building Improvements
Cost of furnishing the property
Lost interest on investment (the interest that would have been earned on your investment between the time at which you purchased the property, and the time at which it was first let)
Lost interest on deposit (the interest that would have been earned on your money deposit if it had been left in the bank, between exchange and completion)
http://www.landlord.co.uk
Part Two
Estimate Your Running Costs