Buy to Let – is it the wise market move?
Buy to let was once the king of the investment portfolio, quite often a sure fire solid investment. As we have all seen the property market has changed, some say never to return to what we have seen in days gone by.
When considering a buy-to-let investment you will likely find that your mortgage options are relatively expensive and a ‘good’ deposit will be needed. Morgages do seem as if they are starting to become slightly more accessible though only slightly, including Northern Rock recently announcing a 90% Mortgage.
There is no doubt house sales have slowed and whilst there seems to be more recent interest in the market it is far from what could be described as ‘bouyant’. We all need somewhere to live and renting is being described as the new buying, so it buying to let could still be an interesting investment.
Cons of buy to let at present:
- the fall in property prices, it is uncertain when they will level out.
- those buying to let need to be able to shoulder a fall in value in the short term
- a healthy deposit towards a mortgage is needed
- it is vital that the right property is purchased; one that will be in demand and easy to let.
Look at the facilities in the area you choose. transport networks, proximity to shops and good schools, and commuter belt location are all good recommendations for buy to let purchases. These things will entice the rental crowd who are looking for convenience rather than ideal home to own.
Furthermore, think carefully about who you want to let to. Some of the most popular areas are those near to university towns, where students are always looking for somewhere to live. Students need somewhere that is not overdressed, is compact and is a good price. Executives, however, and young professionals may be swayed by swanky location and modern, stylish décor, rather than the basics.
Of course, all of this depends on your budget and to this end it is vital you get the most from your money. Looking for the best deal is not simply a matter of choosing a mortgage out of the adverts in the newspaper, as impressive savings can be made by looking for a deal with an independent provider.
In addition, it pays to consider locations that are not influenced by where you live. Your home may be ideal for you, but not for the average person who rents, and there will likely be better areas for buy to let. Research is vital, and will enable you to get the best deal possible.
It is essential to enter into a buy to let arrangement knowing that the days of massive property price rises are long gone. This is a long term investment and not something that should be considered lightly. Renthusiast.info have written an interesting article related to those becoming a landlord in an un planned way – Sarah Beeny defines the “unplandlord”
Despite the current fall in rises, however, there is only so far that the market can plunge: prices will level out in time, and values will return, if not to the heady heights and rate of growth of a couple of years ago.
One advantage of getting into the buy to let market now is that there may be bargains to be had at auctions. Repossessions are on the rise, with a further 75,000 expected in the coming year, and many of these properties will be sold at auction at good prices.
There will always be people willing to rent, so if you have the ready cash and ambition, buy to let may still not be a bad long term investment.
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