Ever since the dawn of “Homes Under the Hammer’, the popularity of buy to let (BTL) purchases has steadily increased and, even with recent changes to tax laws, data released by Sainsbury’s Bank Mortgages suggests there have been more recent sparks of interest in the purchase of these types of investments.
Across the country, almost 1 out of 10 of adults has displayed a keen interest in buying a property with the purpose to let out. One third of them admitted a BTL mortgage caught their attention down to financial reasons or a change in income and saw this as a financial opportunity and a potential profitable window!
On the other hand, one quarter of people have inadvertently slipped into the BTL world due to an inheritance and have turned into what’s been referred to as “accidental landlords”.
Of course, when thinking about the appropriate property to purchase as a new investment, the list price is not the only thing to consider. Whilst you can often buy flats much cheaper than you can houses which will therefore provide a good gross return, when you take in to consideration management charges which knock a hefty chunk out of your rental income, the net return is equal to if not lower than an equivalent sized house in the same area. Therefore, it is important to consider all associated expenditure and ensure you add this into your calculations on financial return.
Often, the right house that makes the best return will not be where you are based, and you should not restrict yourself to staying local when considering an investment purchase. When you discuss a potential portfolio with an estate agent, take advantage of their expert local knowledge which means you can stray further than your immediate vicinity for the purchase without losing confidence in your decisions.
The same applies to the associated management; with in house property managers, most estate agencies are perfectly placed to keep your investment property running smoothly and dealing with any issue that arises so that you do not have to continuously travel to sort things such as broken lights and locked out tenants! It’s a service worth its weight in whatever monthly management fee is agreed.
If purchasing an investment property for rental is something you are considering or that appeals to you, please contact any of our branches; we are more than happy to talk you through your various options.