It’s something that many people look to do in the future: buying a property with the sole intention of letting it out to make money on it. There’s no question as to why, it’s a great investment and a way of earning an extra income alongside whatever job it is you do already, but why is now a good time to invest in a buy to let property in the UK?
With the population in the UK ever increasing, it’s inevitable that at some point all of these figures that are actually people, will need a place to live. It’s suspected that in the next twenty years, the number of households in the UK is set to reach 28 million – this is the equivalent to an increase of 250, 000 households each year. In that same statistic, it’s said that single person households – who tend to rent rather than buy – will increase by a further 3.2 million. The latest government study suggests that around 232, 000 properties will need to be built in England every year, just to keep up with the growing demand for housing. With statistics like this, it’s clear to see why a buy to let property could be the perfect money-making investment, now and in the future.
The Income Itself
The income itself is a huge plus to buying a property and letting it out. By renting out your property to tenants, the money you make from them each month can easily go towards your own mortgage, meaning you’ll probably pay it off quicker in the long run. If you can take advantage of a low buy to let mortgage rate, you can ultimately increase your income even further – your monthly payments being lower will make your profit margin bigger, and after all isn’t that the goal? Whether you put it into savings, the pension pot or pay off your mortgage with it, the extra money can be a huge help along the way.
The Current Property Market
You’ll probably have heard it said recently that we’re currently living in a “buyer’s market”, meaning that house prices are considerably lower than they have been in previous years. Now is potentially the perfect time to get on the property ladder, particularly for first time buyers. Because of this, now is also the ideal time to invest your money into property. With the prices being lower than ever before, you’ll pay less for your investment and chances are it will only increase in value as the years go on. However, despite housing prices never having been lower, the demand for well-priced buy to let properties is steadily increasing.
However, a fear a lot of people might have when investing in a buy to let property, is what happens if it doesn’t work out how you intended it to? If you find yourself in a rut with your buy to let where you’re not making any extra income, there are options for you. With current low housing prices, you may feel reluctant to sell the property on, because added on top of this is the additional expenses of estate agent fees, valuation fees, and of course waiting around for the right buyer. But it’s not to worry, there are alternative routes of selling your home that you can go down if you really feel this is the only option for you. For example, going through a cash house buyer could save you the money and hassle of selling the property the traditional way, and help you to get your money back quickly. If it doesn’t work out, remember it’s not the end of the world.
Make a Checklist
Finally, if you really are serious about investing in a buy to let property in the UK, make sure you’ve got a check list prepared. It’s a big investment and a lot of money to waste, so make sure that you’re done your research well in advance and take the following things seriously into consideration:
- Shop around for the best buy to let mortgage package available to you and make a choice wisely.
- Research the area in which you’re looking to buy. Learn about the area itself and make a consecutive decision as to whether your target tenants would enjoy and be interested in living here.
- Prepare a detailed budget including all purchase costs, management costs, fees and the amount of rental income you anticipate.
- It never hurts to seek good professional advice, not just to start with, but throughout your buy to let venture.