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Lettings agent urges investors to be cautious

A North East lettings advisor is warning investors to be cautious when purchasing buy-to-let property in unfamiliar areas.

The current rental boom has seen surge in the number of properties being bought to let and Ajay Jagota, managing director of KIS Lettings is urging investors to be do their due diligence before signing for any property.

According to the Council of Mortgage Lenders, when the buy-to-let market was in its infancy in 2001 landlords had obtained 185,000 loans to invest in rental properties and today landlords have taken out 1.39 million loans, worth about £160 billion.

Ajay, who owns and lets a number of properties across the region in addition to running KIS, is worried that those keen to grab property at bargain prices will be tempted by some of the so-called property finder agencies.

He said: “There are many fantastic organisations that do a great job supporting landlords to find potential investments. But as an investor myself, I’ve noticed an increasing number of emails from the types of companies that take advantage of an unregulated market, offering to find and manage buy-to-let investments for out-of-area landlords.

“Investors need to ensure they don’t buy unprofitable property by putting their trust, and budget, in the hands of these agents. Any purchase should be made after making a full assessment of the property, including examining the property and surrounding area in person.”

Ajay established KIS in 2006 after managing his own portfolio of properties for 15 years, he works closely with 300 landlords across the North East to manage their lettings for a five percent fee.

Ajay added: “In the most extreme cases there have been criminal scams where people have bought property through a third party finder agent. The agent charges the investor much more than what they actually buy the property for and then fraudulently keeps the difference.

“In the more usual cases the property finders are so keen to make their commission that they don’t have the investor’s best interest at heart and advise on unsuitable property purchases.”

Ajay’s essential checklist for any property investor:

• Location, location, location – do your research and ensure you get to know the area. Consider transport links, the number of large employers nearby, schools, crime level – all of which help to build a picture of how easy it will be to let.
• Speak to the experts – don’t be afraid to ask a letting agent in the area what they think of the property. Ultimately they could be tasked with finding tenants so it’s in their interest to give sound advice and if they think it’s a bad move they will tell you.
• See for yourself – before any contact is signed make sure you see what you are buying.
• And crucially – know what you want out of your investment, a high yield through low mortgage payments and a high rental income or a longer-term capital appreciation profit.

This was posted in Bdaily's Members' News section by Ajay Jagota .