Is Buy-To-Let Right For Me?
The “buy-to-let” scheme has been growing in popularity, suggesting that this could be an ideal time to get involved in property investment. We’ve always been attracted to the prospect of investing in something that is lucrative and reliable, with properties boasting both of these essential investment traits. So would it make sense to jump on the bandwagon and pursue this type of investment as soon as possible? We take a look at the fundamental aspects of buy-to-let and why it could be the right choice for you.
If you’re interested in investing in the property, chances are you’ve heard of buy-to-let. It’s simply a scheme whereby the investor is solely interested in renting the property out. The number of rented properties as a result of buy-to-let went through the roof back in 2012, setting a new record. One of the main reasons for the schemes success is the sudden high demand for rental properties as a result of first time buyers struggling to find an affordable mortgage to join the property ladder.
If you plan on buying to let then you’re probably aware of the benefits of investing in a property. It’s certainly not the same as other types of investment that bring about short-term successes. To determine whether or not buying to let is the best option for you, you have to weigh up what it is you want to gain from your investment. Are you looking to match long term goals? Are you swaying towards investment opportunities that offer reliability? If so, you’ll probably benefit from the buy-to-let scheme.
However, there are certain issues that might crop up once you decide to pursue an investment in property. If you’re property doesn’t acquire tenants, you won’t be getting anything back and you’ll be forced to work harder to find someone to live in your property. There’s also regular maintenance work to consider, which can is vital if you’re treating your investment as a second property. You may even have to cover the shortfalls if your rental income isn’t what you expected it to be.
On the other hand, you’ve got quite a lot to get excited about as well. An investment in property at the right time could provide very lucrative results, especially if property prices begin to rise and you can start asking for higher rent. The low interest rates will make your mortgage more affordable as well, but one of the biggest attractions is buy-to-lets simplicity and the fact that it doesn’t take much to get your head around what’s going on.
Remember that you’ll need to save for a deposit before you can acquire your buy-to-let property, so seek advice about this beforehand so that you’re fully prepared and know what’s affordable. There are other things to consider as well, such as the tenants you’re targeting and the location of the property. For example, students will prefer an urban location where they can access public transport. Most importantly of all, get some research under your belt so that you’re aware of some of the most lucrative cities and locations. It’s an ever-changing business, so always keep up to date with what’s going on!
Mike James is an entrepreneur with a keen interest in the housing market. He enjoys refurbishing properties to release back on to the lettings market and writing about his exploits for Property Frontiers.