Buy to let – it is a very old concept that existed in the times of landlords in Britain. Though the concept is still prevalent, it now exists with certain minor changes. The boom in the real estate industry in the mid nineties has made the 'Buy to let' system surface again. Being a good medium to get returns on property, many people are interested in investing in buy to let properties.
However, the concept of buy to let has two implications. On one hand it can be treated as an 'investment' made to buy a house or residential property to be let out to earn profits. On the other hand, buy to let often refers to a type of mortgage that helps in buying a property for the purpose of letting out. As an investor, you can choose to purchase a property entirely on your own if you have sufficient fund. Or else, you can also opt for buy to let mortgages.
Researches prove that in UK, the concept of owing a buy to let property has gained popularity given the long term benefits you can earn from it. Prospective investors have lots of choices but it is wise to settle for only the best buy to let mortgages on offer. To keep legal hassles at bay, it is advisable to seek the help of a mortgage adviser who can guide you on buy to let mortgages.
Why Invest in Buy to Let Properties?
Buy to let properties act as great investments in the sense that you invest less and get back more.
It is a good way to earn a stable income for a long time.
The buy to let property also acts as a fixed asset which you can sell at higher prices with a surge in real estate property. This is yet another reason why buyers in UK find investing in buy to let properties so rewarding.
Buy to let property also helps investors in making savings on taxes. Returns earned on such properties are considered equivalent to your salary, hence, only 22% to 40% is taxable.
A well chosen buy to let property can turn out to be a real boon and go a long way in repaying your buy to let mortgages, in case you have one. So, a careful selection is necessary. Not all buy to let properties will be profitable in the long run. If it does not fetch you a good sum, then it is nothing less than scrap. So keep the following points in mind while choosing a property.
• Choose a buy to let property in a good area. By doing so, you can quote good rentals.
• Be wise in your judgement while choosing the property. Assess its market value so that you can earn profits from it.
• Decide on the rent that has to be quoted. Consider whether the property you are buying is worth the rental or not and whether it will fetch long term rentals to pay off any buy to let mortgages taken.
• Keep the property decorated and furnished so that it attracts potential tenants and gets you a good rental income.
• It is better not to buy a property that has maintenance issues. It will incur more costs and increase your budget.
Thus, you can see that buy to let properties in UK is a new way to invest money for reaping long term benefits.
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Michael Hatfield offers advice on best buy to let mortgages and also provides mortgage advisers
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