Well, before you write an initial version, you should do some or all of the following:

Talk to and learn from experienced BTL investors. That doesn’t mean your friend down the pub who has an opinion on everything, but rather people who have bought and sold at least a couple of BTL properties. Ask around among your friends, family, work colleagues, school-run parents etc. if you really can’t find anyone among that pool of people you aren’t trying hard enough, but another alternative is to join one of the online forums for BTL investors. Read the posts, see what questions are being asked and when, you’re ready, ask intelligent and respectful questions.

This is the single most important thing you can do before you write your BTL plan, because you’ll learn so many things that otherwise you’d only experience through going through the costly trial and error of making a BTL investment yourself. Learning “on the job” is not recommended, because most new investors usually sink all their cash into one investment - and if you make a mistake (most commonly by buying a property in the wrong location, or for too much money than necessary), then that’s the end of your BTL dreams for some considerable time.

Put another way – if you’ve just read these paragraphs and think no, I have enough business sense that I don’t need to speak to people who have done this before, then please stop and take a good look at yourself. How can you possibly know more about a market you have never invested in before then people who have invested? You don't have to take every bit of knowledge and advice from BTL investors you meet, but when you have their views then you can apply your common sense to take certain things on board and discard the rest. But without that knowledge as a base, then you’ll likely make major decisions based on your flimsy knowledge of the BTL market.

Put on your shoes and walk the streets! If you have already identified some potential areas for a BTL property, then get down there as soon and as often as possible. Use common sense. If you’re aiming for a property for commuting professionals, then go at 7.30 in the morning and see just how many flats empty out well-dressed business men and women on their way to the local train station or bus stop etc. In an area where you might want to rent a property to a family, check for people carriers parked in the street, for nearby parks, for good local schools etc. This time you’d visit just before the morning and afternoon schools runs, to see how much family “footfall” there is. In all the areas you visit, make a note of how many properties are up for sale or rent, and how quickly they appear to be sold or taken off the market.

Visit estate agencies. Look in their windows, obtain details of properties and develop a feel for the local property market. Visit over a number of weeks, in order to see how quickly properties shift. When you have developed some initial idea of the local area and market, go in and talk to agents. Initially they’ll either bite your hand off or treat you as a joke (thinking you’re a timewaster), so plan what you’re going to say to them and what information you want (such as property turnover, prospects for rented properties etc). A good approach is to say you’re going to make a BTL investment, but that this is just one of the areas you’re considering, so that the agent is clear he or she needs to sell you the area first, rather than some rubbish property he or she has been trying to offload for months now. By the way you must visit agents in person, rather than call them, and please do dress the part – i.e. don't go in jeans and t-shirt, because they won't believe you are a serious BTL investor.

Always take what agents say with healthy scepticism. Many agents you speak to will be a waste of time, but every now and again you’ll meet one who completely understands where you’re coming from and will promptly and professionally fill you in on the local BTL markets.  

This is not an exhaustive list (other ideas include going to property auctions, or visiting rental agencies as a prospective client, to get an indication of what properties are available and what rents would have to be paid) but hopefully you get the idea.

Talking to real people and observing potential areas is the key to putting together initial ideas that at some point will come together and form a coherent BTL investment strategy and plan.

I hope that you’ve noticed that internet has not been mentioned, and that’s because you should only use it as a secondary source of information, to back-up or disprove the evidence you glean from talking with real people and looking at neighbourhoods first-hand.

At this stage, once you have some ideas as to how much properties in potential target areas will cost, you also need to start planning your financing, which is covered in Planning a Buy-To-Let Strategy – Part 3