First-time BTL investors
Taking that initial step into the world or property investment can be challenging for first-time investors, so they arguably require more support than any other type of investor on this list.
Any successful BTL investment requires careful planning, a deep understanding of the dynamics or the market and a strategic plan to enhance decision-making – it falls to brokers to equip their clients with this knowledge and expertise.
Explaining exactly what a BTL property investment involves is a good place to start, but talking them through finding the importance of a good location for their investment and the calculations they need to carry out to gauge potential returns are perhaps of more value.
Furthermore, they can provide educational materials to help investors understand their responsibilities as landlords; this should include an outline of the complexities of BTL mortgage products, the tax implications for their property and best practices for property management, as well as the legal obligations that they will be under.
When it comes to finding suitable finance for first-time landlords, brokers will find that some lenders are unwilling to lend to this type of buyer – their inexperience makes them a higher-risk client.
Brokers must therefore find lenders that are well-versed in dealing with first-time or small-portfolio landlords, as well as providing more hands-on support to the landlords themselves as they navigate the process of secure finance.
Seasoned BTL investors
This level support will obviously differ to their more experienced BTL counterparts, who will be much more interested in maximising returns on their investments and optimising their property portfolios than receiving information on the basics of the BTL market.
As such, their needs will revolve a lot more around navigating the tax and regulatory implications of their investments. Moreover, owing to their pre-existing portfolio, their financial profile can create problems when it comes to securing finance for new property investments.
With this in mind, it is important that brokers have a clear grasp on the financial options that are available to their clients, factoring in the size of the existing portfolio and any debt that has already been secured against it.
Brokers ought to work with lenders that can take an investor's overall financial situation and potential income into account, and perhaps offer more flexible solutions for financing a BTL portfolio, such as consolidating existing debts or allowing second-charge loans.
In turn, this will allow brokers to place mortgages that more mainstream providers might shy away from and means their clients can keep their property investment plans on track.
Holiday let investors
Elsewhere in the rental sector, holiday let investors have additional needs that differ from other traditional BTL landlords. Given the focus on this sub-sector of the property investment market, brokers must also be equipped to deal with clients in this space.
