How to buy your first investment property in Harrogate.

Buying a first BTL (Buy to Let) property is a considerable undertaking for any new investor. Over time, with good management and further investment, it can generate a good income for years to come and increase in value. However, before you take the plunge, it is important to closely consider the following:

You need to fully understand how to identify a solid/suitable property, apply for a mortgage, and find reliable Tenants to justify your investment. You also need to know whether the responsibilities of being a Landlord suit your own schedule/abilities, although here you have the option to instruct a good Letting Agent to shoulder most of the work burden. (I recommend Myrings).


Buying a rental property should not be a reckless decision. There is a great deal to consider, from operating costs and mortgage expenses to finding prospective Tenants and handling maintenance & repairs, etc as owning a rental property comes with advantages as well as downside risks. However, Investment property has some benefits that some other investments, as per stocks & shares, don’t. For openers, you will have far more control over your investment. (for example – property upgrades over time can attract higher-paying Tenants & Rents).

Securing the Mortgage

The key question you need to ask yourself when considering the purchase of an investment property is how much you can afford. Here you can use a mortgage calculator to estimate your monthly repayments and running costs and be better able to talk to a lender to obtain an MIP (Mortgage in Principle). You can even get an estimate online nowadays but remember your investment is governed by different rules to those which apply to buying a primary residence.

Please note – even If you are able to purchase a property outright in cash, it may still benefit you to take out a mortgage, especially if you plan on buying multiple properties. Let’s say that, in simple terms, you have £100,000 in your bank account. You could buy a home in cash for £100,000, and whilst you will enjoy a larger cash flow on your investment, it solidifies your cash into one single asset. However, if you take a loan with a 20% deposit, you could potentially purchase another property or two at a similar price with the £80,000 that remains. While your immediate cash flow will be lower, the returns will grow in the long run as your mortgage is paid off and rent increases.

Start by gaining Pre-Approval

One of the biggest mistakes that potential buyers make is looking for the right investment property before ensuring that they can secure the finance. If you apply for a BTL (Buy to Let) mortgage after you have found your perfect property, you run the risk that the house could go under offer from another buyer by the time you have secured funding.

If you are pre-approved in advance, however, you can take advantage of a good deal at the time you see it—and you will also know exactly what budget you have at your disposal. You can then decide whether you’ll rent the property out as is or if you have money for renovations. You can also decide whether it’s in your budget/business plan to semi-furnish it with some basics such as furniture, beds, and mattresses.

Do the sums

You must estimate your property’s ROI (Return on Investment) – i.e., calculate the ROI by determining the property’s net annual income after all the outgoings as per Mortgage payments, Property Management fees, Repairs & Maintenance costs, Rental Voids periods and other expenses are considered.

Find the ROI by taking this annual net income and dividing it by the amount you originally spent on the property. For example, if you spent £100,000 on your property and the net annual income is £8,000, then your ROI is 8%.

Research and summary.

There’s a lot to consider when looking to make your first investment. It is important to do as much research as possible. It’s vital to buy well. It’s also just as important to bear in mind that all the time you are collecting rent the value of the property (capital growth) is increasing year on year. In the interests of completeness and in brief – the dreaded issue of Capital Gains Tax. Here you need to understand that when you eventually come to sell you do not pay Capital Gains Tax on the entire sales price of the property, only on the amount that is counted as gains, and you are also permitted to deduct certain expenses from your gain to reduce your tax liability. These include Estate Agent’s fees; Solicitor’s fees and the cost of improvement works.

Finally – we are Property experts who can help you handle your investment professionally and efficiently. If you have a property/properties you would like us to manage then please give our team a call.



About Charles

This blog follows the residential Sales and Lettings market in Harrogate, Knaresborough and surrounding villages.You will find information, analysis and guidance here along with news about Harrogate. I’m Charles Myring working in the Myrings Estate Agents Ltd business alongside my son Simon , daughter Gemma and dedicated sales teams. If you're thinking of Selling / Buying / Letting / Renting property locally Myrings would be happy to assist.