Are you looking for a long or short-term buy-to-let investment?
When it comes to investing your money, looking far ahead and considering your future plans is key.
If you don’t need easy access to the money you’re investing, then making a long-term investment is always a promising option, as you can see good returns for your money (especially in property, as house prices can increase over long periods of time). However, if you’re only in it for the short-term, then you may be subject to fluctuating house prices, but that’s not to say that a return on your investment isn’t still possible though, but just less likely.
Understanding your local market
Planning is everything when it comes to investing in property, so taking the time to brush up on your local knowledge is invaluable, as each region differs from the next.
Get to know what the demand is like in your area by speaking to other landlords, estate agents and reading online forums. This will help you decide where to buy your property. You might realise that buying a little further afield from where you originally planned is worth it if the rental market is thriving in this area.
Once you’ve decided where to buy, the next job is finding the right property. Many first time landlords make the mistake of buying a property that they can see themselves living in. However, this is often the wrong approach if you’re planning on buying purely for investment purposes.
Is buy-to-let a good investment?
This largely depends on what you want to get out of it. On the whole, yields are lower than they were about a year ago due to the tax changes (increase in Stamp Duty), and additional legislation is now required for HMOs (houses in multiple occupation) when it comes to planning perspective on the size of rooms for single or double letting rooms. So the market is still busy and LTVs have increased (up to 80-85%) which is great if you’re looking to borrow as much as possible.
Get the right mortgage advice
If you’re seriously thinking about becoming a landlord, we recommend you sit down with a mortgage adviser to run through your finances, the type of property you want to buy and the rental returns that can be generated.
Our knowledge and expertise of the buy-to-let market mean that we’re perfectly placed to help find the right mortgage for your circumstances. Book a free advice call here.
When making your final decision, remember the purpose of letting out property is not solely to make money, you also have a responsibility to provide safe and secure housing to your tenants.
Don’t hesitate to get in touch with our team of friendly mortgage advisers if you have any further questions.
*Source: Game of Homes report from The Resolution Foundation, June 2019