There have been many constraints placed on investors when it comes to renting out properties. The increase in stamp duty for second house buyers has not helped; however, a buy to let property is still a viable and profitable business plan. The benefits are outlined below:
Good investment
Property can be one of the safest ways to invest your money. If you invest wisely and do your research, you will always retain the original money you put in. Property investments can take the place of a savings account – when you pay your mortgage each month, you pay into your ‘savings account’.
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Two types of income
A buy to let investor essentially has two sources of income. The obvious one is the rent you achieve from having a tenant. The aim should be to charge enough to cover your mortgage plus more to make a profit. The second is through capital growth and your investment property gaining value. When investing in a property, consider the area you are buying in and research what the possible rental yields could be.
Renting is popular
The market for rental property is growing. Property investment is becoming increasingly hard for first-time buyers and people are therefore renting instead of buying. As a consequence, your buy to let investment should not remain empty for long, minimising any loss of rental income. Although your property may be unoccupied, this lack of income may be offset by the appreciation your property is gaining. Always consider using property inventory software from a specialist such as https://inventorybase.co.uk/ when looking after your investments.
Buy an apartment
Apartments are becoming the fashionable place to live, especially for young professionals. An apartment is typically cheaper to buy and therefore buy to let investors can build up a property portfolio quicker than if they were purchasing houses.
Long-term tenants
Due to the rental market becoming popular again, there has been an increased pattern of long-term rentals. Families that cannot afford to buy a house but still want the security for their children will look to rent a house for many years at a time. This reduces the risk of being a buy to let investor.
A buy to let investor should always do extensive research. Consider all avenues, take advice, and your business should thrive.