What Is Buy To Let? Buy-to-let is a phrase pertaining to the purchase of a property specifically to let out, that is to rent it out. Buy to let properties are normally residential but the phrase also incorporates student property investments and hotel room investments.
If you have been thinking about a buy to let investment property, you might be a little nervous because of recent economic events. The fact is, economic trends always move in cycles. This includes property values, mortgage rates and the popularity of different types of investments. When it comes to buy to let, remember that as long as people are letting houses and flats, there will be opportunities in this kind of investment.
Here are some factors to keep in mind for any buy to let property:
Location: Think of the Future as Well as the Present
Choosing the location of a buy to let property is never easy. The decision requires proper and careful planning. When finding a buy to let property, you should take into account the location and price of the property. The location of an investment property is possibly the single most important factor. You should research as much as you can about the location. Statistics, such as the economy, demographics, and crime are all important, but so is your general impression of a place.
The Property: Suitable for Letting?
When you look at the property, try to see it through the eyes of someone who might be letting it. If you were such a person, does it look presentable? How convenient is it to downtown areas, major roads, public transportation, and schools? You also have to look at the property as an investor, of course. As with the location, you have to consider the future -especially the near future- as well as the present.
For a buy to let investment to be profitable, you have to be able to do an accurate estimate of your costs versus the revenue the property will bring. This may sound obvious, but many investors do not consider all of the expenses, or they overestimate the income they will be generating. These are some of the things to consider before entering a buy to let investment property. If you choose carefully and do the research, this can still be a profitable opportunity for UK investors.
Why Do People Still Invest in Property?
What makes investing in property really a good investment option? When there are other investment avenues open, why is it that investment property never fades out? Even while the other avenues are offering better rates of return, people still go in for investing in the real estate. The reasons abound, from the purely financial consideration based on profitability to the more emotional and psychological reasons. Let us explore some of the reasons which make investment property hot.
Absolute returns matter:
Investing a big sum in the real estate sector over a period of time can actually make you earn big after some period of time. While some other options may be offering you better returns, there might be the requirement of lower sums which might, in fact, make you diversify more rather than putting all money in one option to get maximum returns. In property, you have to invest big.
A thing which you can own and use:
Commodities or metals, most of the times, can not be used. These can only be used by selling these off or mortgaging them to convert these into money which is then used for doing anything else. Property can be used as such either for living or for work anytime that you like.
Earn income in more than one way:
With investment property, you can take the rental income by leasing out your unit or you can even sell off the same during the peak rate season to get the maximum profit. Rental income can be substantial in some areas. You can retain the title to the property even while earning income from it.
Why is it that investment property never fades out?
Even while the other avenues are offering better rates of return, people still go in for investing in the real estate. With investment property, you can take the rental income by leasing out your unit or you can even sell off the same during the peak rate season to get the maximum profit.