The buy to let strategy has long been a firm favourite of thousands of landlords throughout the UK, but if it’s a concept that you’re not familiar with and would like to explore further, here is a short guide:
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What exactly is buy to let?
Buy to let refers to a property of any kind that is bought by an individual (or company) for the specific purpose of making it available to paying tenants, and there are specific mortgages designed for this purpose, too.
When you become a buy to let landlord, you are someone who buys properties with the intention of renting them out to an individual tenant, or renting them out to a number of tenants.
How you decide to charge your tenants rent will be entirely up to you, but most opt for monthly payments, and in an ideal world, those payments help cover the cost of the mortgage and any other associated costs, while still giving you some money left over as profit.
What are the advantages of buy to let investments?
Investing in buy to let properties can be a great source of income; a great way of making your money work hard for you. Below are just some of the advantages of becoming a buy to let property owner:
It’s a relatively reliable long-term investment
While there is little you may be able to do about property prices in the short term– they may rise and fall, of course – there’s a strong chance that your property will increase in value over time, and when you come to sell it (provided it’s in good condition), it should give you a tidy profit.
It will give you a source of income
If you manage your finances well, when your tenants pay you rent on the buy to let property, you should be able to cover your mortgage payments and have a little left over each month to use as you please.
Rental properties are in high demand
For all of those people who can’t afford to buy a property, or who don’t wish to commit to a mortgage of their own for whatever reason, rental properties offer them the perfect solution. And, with so many people not in a position to buy their own home, rental properties remain in high demand.
Things to think about when selecting a buy to let property
While buy to let properties are often a worthwhile investment, it’s still important to think carefully before choosing your property, and here are some factors to consider:
Your budget
A buy to let is still a significant financial investment, even if it does give you a great return on your money, and you’ll need to plan your budget accordingly to make sure that the income you gain from renting it out, covers what you need it to.
Tenants
The type of property you choose might be more suitable for a certain tenant genre, and if you wish to target a particular tenant type, you’ll need to select the property you buy with them in mind.
Location
Where your rental property is located could be a key factor in how well you’re able to attract tenants, for example, students will find accommodation situated close to the local college or university desirable, while parents may look for a home that’s close to the local school.
Layout
Do you look for a home with communal areas, such as what might suit student accommodation, or if you’re trying to attract families, should you make a garden and more bedrooms a priority?
Maintenance
Try to choose a property that won’t eat up all of your rental payments in repairs and maintenance.
Buy to let experts in Nottingham can help you build up your buy to let portfolio or start your rental journey with your first buy to let property. Just be sure to take all of the above factors into consideration when doing so, and you could soon be enjoying an immensely profitable buy to let experience.