The Pros And Cons Of Buy-To-Let Investments

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Current low interest rates on mortgages and recent positive signs in rising property values have led to a surge in buy-to-let investments. Mortgage credentials, for potential first-time buyers, are also far more stringent, with typical deposits being 10% or higher on a first-time mortgage, which has led to even greater demand from tenants. Compared to the type of return you are likely to get by keeping your surplus dosh in savings accounts, the option of investing in good old bricks and mortar may have seemed very tempting of late. However, appealing the idea may seem, there are a few factors to bear in mind before plunging into landlord territory: • Interest rates may be low currently but they are unlikely to remain so low – you need to …show more content…

Choose the right property If you want to be hands-on with any renovations always bear in mind the amount of time and effort you will be investing as well as the actual monetary return. • Pros o You can haggle harder for a property needing a complete refurbishment and even a tired property only requiring an update will be more negotiable. o Investing your own time and skills will help to increase the value of your investment. • Cons o If it takes you six months to update a property, that’s six months without a return on your investment – it could be a better investment to buy something which needs very minimal work to get it tenant ready. Consider your target tenants • If you buy in a university catchment area your target tenant could be students - you should aim for easy to clean and simple to maintain furnishings and fixings – you are likely to have a high turnaround of tenant, however. • If you are gearing towards professionals think stylish and minimal and in an area with plenty of bars, restaurants, etc. • Families may mean more maintenance between lets but they are more likely to have their own furnishings and may want a longer lease which leaves less ‘voids’ to

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