Buy to let is an investment where you buy a property – usually with a mortgage – and rent it out. Over 80% of landlords cite investment as a key motivator in deciding to let property.
If you’re looking to invest, you should consider buy to let property. Let’s weigh up the pros and cons of buy to let alongside other types of investment:
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Our initial mortgage consultation is free. We will charge a fee between £399 and £999 that is payable on application. The amount we will charge is dependent on the amount of research and administration required. We reserve the right to charge a subsequent fee of £99 for each further application that may be required.
|Type of investment||Pros||Cons|
Are you wanting to buy to let for capital appreciation, or for the rental income? Decide which as this is key to where and what you buy. It is unlikely that you will achieve both unless you have a substantial deposit.
Look at the number of letting agents nearby as this will show you how buoyant the lettings market is. You could either do this yourself or talk to a letting agent to understand the demand for rented properties in your area.
Research the potential rental income and also look at how close the property is to shops, transport links, schools and any other amenities you think would be important to tenants.
By becoming a landlord you are essentially running a small business. This property is not going to be one that needs to reflect you and your tastes, so be practical.
Refurbishments can offer capital growth in the short term only if you have the expertise.
There will be numerous day to day maintenance and management costs you will need to factor in such as letting agent fees, landlords insurance, safety checks, rent insurance, general maintenance and more.
A buy to let mortgage is specifically designed to finance a property that is to be rented out. Mortgage lenders will look at the market value of the rent a property could attract as well as the size of the borrower’s income and their credit worthiness when assessing a mortgage application.
The right property can often depend on your original objective for buying to let. If you’re investing for capital appreciation then you’re best opting for property hot spots where your return is most likely to be greatest. However, if you are looking for rental income, consider areas where property is cheaper.
In general cities with universities tend to offer reliable returns for buy to let.
If you are going for capital growth then stick to established areas which can appeal to singles, couples and families, especially for your first buy to let purchase.
You don’t necessarily need to limit yourself to your local area. Go where the market looks to offer the best return and remember there are local letting agents like Your Move who can deal with any queries on your behalf.
Introducing our new online portal to help Your Move landlords manage their rental propertiesFind out more
A personal service aimed at finding the most suitable mortgage for you.View Mortgages
Useful Frequently Asked Questions to help guide you through letting a property.Find out more