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With rental incomes steadily increasing over recent years letting out a property can be a good way to bring in a regular income. If you can find the right property and the right mortgage it is possible to make a rental yield of around 5 – 10% depending on where you’re based.

Although buy to let can be a good investment there are also risks to consider too. It’s really important to make sure you’ve got your sums right and thought about everything renting out a property entails before committing to a mortgage and becoming a landlord.

The buy-to-let mortgage market is quite competitive, but lenders are still more cautious than they were before the credit crunch. Generally, they’ll expect borrowers to put down a deposit of at least 25 per cent of the purchase price of the property – and possibly 35 per cent on new-build homes, which are regarded as more risky investments. Our buy to let calculator will give you an idea of how much you will be able to borrow.

Lenders also expect you to be able to prove your income and to provide evidence that the market rate for rental income on the property you want to buy is at least 125 per cent of the mortgage repayments.

An adviser will help you resolve these issues. You will also need to research the market carefully in order to find the best place to invest.

Getting your tax arrangements absolutely right is a crucial part of buy-to-let investment. If you fail to get to grips with the rules, you could find yourself landed with sudden and unexpected bills, or even end up in hot water with the authorities.

It’s also important you understand what taxes must be paid and when because these are costs that will affect the returns on your buy-to-let investments. These include:

Stamp duty

Income tax

Capital gains tax

Inheritance tax