As a buy-to-let landlord, managing your money whether it’s in relation to your mortgage or investing your profits, is no doubt high on your agenda. Try the following five finance tools to help you make the most of your money.
- For anyone who has invested in buy-to-let property it is a good idea to keep track of how much your property is currently worth, as this can be an indicator of whether you have made a sound investment and can inform future ventures. There are many house price calculators online, which do just that.
- One such is that on Nationwide’s website – http://www.nationwide.co.uk/hpi/calculator/calculator.htm. It is very simple to use; you only need to input the price you paid for the property (or the last valuation), when this was and when you would like to know its value for (usually the current quarter), as well as the region in which your property is located. Like many house price calculators it does not discriminate between individual towns and cities, types of houses and the varying condition in which they might be in, which will obviously influence a property’s value.
- If you are looking at taking out a loan to cover the cost of your property, it is always important to know exactly how much money you will be repaying. Using a loan calculator allows you to determine how much each repayment will be.
- The Guardian’s loan repayment calculator is very user friendly – http://money.guardian.co.uk/calculator/form/0,,603119,00.html . You simply enter the sum of money that you plan to borrow, the interest rate of the loan, how often payments on the loan will be made and the number of payments that there will be. This pulls up a loan repayment schedule, showing the balance, interest and payment on each instalment. The total interest that will be paid is shown separately, allowing an easy comparison to be made between different loans that you might be considering.
- Any landlord needs to know how much money they need to be charging in rent to cover the cost of their mortgage repayment each month, which will then provide an indication of how much extra you will need to charge to make a profit. A buy-to-let mortgage calculator can provide this information within seconds.
- ProBuyToLet’s mortgage calculator is ideal – http://probuytolet.com/buy-to-let-mortgage-calculator/. All that you need do is enter at least one of the following – your proposed rental income, value of your property or the mortgage interest rate – and the calculator will work out the total sum that can be borrowed and the monthly repayments. This tool shows landlords at a glance how they can make a profit from their property, but you still need to bear in mind that other costs such as credit history checks will likely increase costs, so rents should be set accordingly to cover these costs.
- If landlords can anticipate how much rental income they will have each month, then they will have an idea about how much they will be able to save. Knowing this information can allow you, with the help of a savings calculator, to determine how much money you will be able to make through a savings scheme.
- This Is Money’s savings calculator – http://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html – is very straightforward, only requiring you to enter the amount that you plan to save each month, how many years you plan to save for and the interest rate. This allows you to easily see how much your investment will be worth.
- If you are looking for a bigger return on your profit from your buy-to-let property than placing it in a savings account, investing it in stocks and shares might be an option for you. With so many to choose from, it can be difficult to know where to start, but using a stock tool can help you to identify where you might like to invest your money and what return you might expect.
- The stock screener on Market Watch’s website – http://www.marketwatch.com/tools/stockresearch/screener/ – allows you to screen all the available stocks on a number of parameters to select those which fit your criteria. With potentially ten different parameters to complete, you can really narrow things down if you wish.
However, if you want to keep things simple, you can use as few of the selections as you wish, perhaps only entering the price per share, how well they are outperforming the market average and which industry group they are from. On screening the results you then have the option of selecting how much information you would like available to you – choose to go with the default settings or pick extra information such as the 52 week high and low. You also have control over how the results are displayed, in either ascending or descending order for one of the criteria you have chosen to screen the results by, so for example if the percentage change is most important for you, select that. The number of shares that it throws up when only a few of the parameters are selected is quite daunting, so the more specific you can be, the easier it is for you to process the results.
Note: This is a guest post.
About the author:
Ruth writes about online finance tools and technology for a number of UK based finance blogs and journals. She’s amazed by how much power today’s investors have at their fingertips.