Buy To Let Investment

 

PROPERTY ADVICE BLOG - Buy To Let Property Investments

For all the best property advice and information on Buy to Let Mortgages follow PROPERTY ADVICE BLOG’s in-depth guide below.

In a climate of financial change, more and more people are choosing to rent property as opposed to taking out a mortgage. Therefore if you are interested in buy to let mortgages, now could be a very good time to find tenants. As a further incentive, a buy to let property can provide a regular income from rent and could increase in value, making it a good long term investment.

In the past, those interested in the buy to let property market had to have a strong financial background to be able to buy new property. However, nowadays thanks to buy to let mortgages the market has become increasingly accessible to people from all walks of life.

How do Buy to Let Mortgages work?

The phrase Buy to Let Mortgages refers to the investment strategy of buying a residential property which is let out to make profit. When you buy a buy to let property you can use your rental income to make the monthly mortgage repayments. Your tenants pay for the mortgage until it has all been paid and you are then in full ownership of the building. After this point any rent you receive is a regular profit. Or if you prefer you could sell the property and take away a large lump sum of cash.

However, be aware that if you don’t have any tenants and are not receiving rent, the mortgage will still have to be paid.

What are the main differences between regular mortgages and buy to let mortgages?

In general there are many similarities between buy to let mortgages and regular mortgages. However, the main advantage of owning a buy to let property is that the lender will base the loan on your potential rental income as well as your salary, so you may be able to take out a bigger loan than expected. When a lender considers a loan for a buy to let property they will look at all the possible risks involved. The size of the loan is usually dependant on the expected rental income, and typically your lender will expect your monthly rental income to be around 25% higher than your monthly mortgage payments. Lenders who offer specialist buy to let mortgages often include a fixed rate of interest, although in todays market PROPERTY ADVICE BLOG recommends you consider a tracker mortgage as interest rates are anticipated to fall over the coming months. Please take your own independent advice.

PROPERTY ADVICE BLOG recommends taking impartial financial property advice before signing a contract, so that you can find the most suitable mortgage for your individual circumstances. As buying to let requires planning, organisation and effort, you may also want to consider whether you have enough time and resources available in order to buy to let property successfully.


Is now a good time to let out property?

There has been a well documented boom in buy to let property investment in the past few years. Recent reports suggest that many potential first time buyers are choosing to rent instead of buy until the market stabilises. Areas such as Greater London and East Anglia have seen a marked growth in rental yields over the last 12 months, as tenants are paying around 7% more than they were around a year ago. What’s more, due to the credit crunch and lenders tightening their belts, many people are choosing to rent, as they simply cannot afford to buy.

Until new home owners begin to trust in the property market once more, property investors will find that now is a great time to own a buy to let property. In this current climate it seems that buy to let mortgages are becoming increasingly popular, which means that potential landlords may be able to take advantage of the UK’s current rental boom. However the number of buy to let mortgage products available has reduced considerably during the current credit crunch and lending criteria have tightened. For those able to get finance (or if your fortunate enough to be a cash buyer) then PROPERTY ADVICE BLOG consider this to be the ideal time to pick up rental properties at bargain prices.

PROPERTY ADVICE BLOG tip!
If buy to let mortgages look attractive to you, remember there are many risks associated with this method of investment. Many people invest unwisely by choosing bad locations or unsuitable property. Owning a buy to let property is not a sure fire way to financial success without careful deliberation and sound property advice.

Property Advice Blog has created an informative guide over the next few pages for those who have no previous knowledge or experience of the buy to let property sector. By using this general guide in conjunction with more expert advice from financial and property advisors, you’ll be able to make an educated decision about this promising market.

 

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