Buy-to-let is back with a boom with increasing numbers of buy-to-let products being taken out by investors. The rental market is on the rise, meaning more investment opportunities for those already with a property portfolio, or those looking to start one.
There are, however, some things you really need to consider when taking the risk of this investment. In my first series of articles I’ll present what I believe to be some of the main reasons for, and against, purchasing a property with the intent of renting it out. First, let’s look at the potential pros of purchasing a property for buy-to-let intentions:
First-Time Buyers Are Turning To Renting
It’s no secret that it is difficult for first-time buyers to get a mortgage to get themselves on the property ladder. This may not be ideal for estate agents, but letting agents are seeing an increase in the amount of first-time buyers who are turning to renting a property while waiting to save a deposit or for mortgage lending to become more relaxed (which at the present time appears highly unlikely). This means the rental market is on the rise as it becomes the one stable housing solution available.
Lenders Are Seeing Buy-To-Let Potential
Years ago, lenders were hesitant to deal with Buy-To-Let mortgages, as the risk was high and the rental market was still growing. Things are changing, and in the past year lenders have seen 22% increase in Buy-To-Let mortgages being taken out with no signs of stopping. With this ever-growing interest, lenders are beginning to truly embrace Buy-To-Let and are offering numerous deals on these mortgages.
Stronger Negotiations On Prices
As an investment buyer you are in a strong position from a negotiation standpoint, almost equal to that of a first-time buyer. You aren’t involved in any chains, and will be considered lower risk than those waiting for their property to sell. This will really help your chance of getting your offer accepted, especially when considered against others in different circumstances. Make sure you keep this in mind when making your offers!
No Limit On Location
When you buy a property with the intention of it becoming your home, you are limited to where you purchase your property as there are numerous personal factors you need to keep in mind. When it comes to a buy-to-let property, there is nothing stopping you researching the best places for rental, and purchasing a property in another city. With countless Letting Agents around to look after a property on your behalf, you are free to choose a property you know will give you the best return on your investment.
Rental Is On The Rise
When it comes to renting a property out, the current market is really the place to be. As mentioned earlier, there are now a larger amount of people looking to rent properties for a number of reasons, and it shows no signs of stopping. Prices of properties are stable, and as long as you are realistic about your rental income, you should have no trouble finding a tenant.