The first step in analyzing any deal is to be very clear about your goals. Do you want to build up a long term portfolio and hold properties for the long term? Or do you want to buy properties and sell them on as quickly as possible? If the former, then you need to consider where the property market is going (we ain’t in Kansas any more) and what resources you have to put into any property you buy. When you dig into any deal lots of questions come up.
How much cash flow is there?
What makes a good buy-to-let deal?
What’s the highest price I can buy at, and still have cash flow?
Will I make a monthly profit at all?
What difference does the mortgage interest rate make?
What monthly costs do I need to include?
The FREE Singing Pig property deal analyser for Buy To Let investments will help you to evaluate deals that you see, but remember that before entering into any investment you must take professional advice from a lawyer and an accountant. Also make sure that you include everything in your cost analysis – don’t just subtract the mortgage from the rent – you need to allow for insurance, void periods, management (even if you manage it yourself, allow for the cost of your time), and repairs and maintenance.