If a buy to let investment is not making a profit immediately, then why is this type of investment still very popular? With property there are two types of profit, firstly the rental income left after costs and mortgage payments, and the potential capital gains. Most buy to let investors look at the long term view, they are happy to purchase a property that is breaking-even, however in order they must rely on capital gains and rent rises.

The demand for buy to let property is quite broad with help from population growth through new children, increasing divorce rates and immigration. It has caused rents to rise at around 10% each year. In simple terms it means rent of £350 a month could be £385 next year and greater the year after if the growth continued at a steady rate.

If you would like to be successful in a buy to let investment it is necessary to assess if your property has the potential to be let out, how much can be expected in terms of rental yield and whether the property needs renovating in order to attract tenants. As soon as you have found your property, you will need to arrange a buy to let mortgage.

Many lenders will require your rental income to be 125 per cent of mortgage repayments. If you were paying off a buy to let loan of £250 per month, you would need to be getting rent of at least £325. A Fixed rate buy to let mortgage allows the borrower to pay a fix rate for a fixed period, normally between two and ten years.

A fixed rate mortgage when buying to let is that you can analyse precisely what your future costs are going to be. It is defiantly worth being aware of the penalties for early repayment, which are included in some buy to let mortgages. There are some mortgage lenders, which allow you to overpay, underpay and even take payment holidays without being struck a penalty fee. If you are looking for a buy to let mortgage, make sure you find a low APR (Annual Percentage Rate).

How does the loan work, does it allow early repayments and what is the result if you face a long void period. In the future you might want to remortgage, does the type of deal you are in allow you to take on such activity.

If you are looking for the perfect buy to let property do not go on your own personal preferences. You must think; it is for tenants to rent for a fixed period and not for you to stay in. Speaking to a letting agent will allow you to get a better idea of what the area in which you mean to buy is like. They will know the area in more detail, including which properties are in high demand.

If you are buying to let for the student market, it is certainly a practical option in university towns. The disadvantages to these are that student rents are normally less, and the condition of your property after let to a student is commonly worse than renting your property to a young professional.