I hope you all enjoyed time with your families and loved ones over the Christmas Holidays and have settled into 2022 in good health, and your new years resolutions are going well. One of the questions I have been frequently asked since the Holidays is …
“Is Buy To Let a good investment?”
Its a really good question, for so many different reasons. Firstly, what makes a ‘good investment’? Secondly, is Buy To Let a ‘good investment for you’, personally speaking?
It might be that you want to use savings as a deposit for a buy-to-let mortgage. The rewards from a property investment will certainly outweigh leaving the money in a standard bank account. That’s great on the face of it, but what are you investing for? Do you want to get a return in terms of a good rental income, or are you thinking long term when the property you buy could be worth a more money giving you the option to sell and profit later on?
It might be that you’re looking at capital growth (your property rising in value) or it might be that ‘good’ means a good rental yield. This means that you get a solid return on your money through the rent you get back.
To calculate the yield, divide the annual rental amount by the property value and then times that by 100. This will give you the rental yield. A good yield varies depending on where the property is located, but you should be looking at around six percent or above. To decide whether your investment is good, make sure everything adds up. Your rental income should at least cover your costs.
Try and keep your emotions out of the process. Buying and renting property should be based on business decisions. Plan, and then plan some more!
There is more to Buy To Let than just investing money. Finances are imperative but it’s not the only factor you should be thinking about. Being a Buy To Let Landlord is so much more than merely buying a property and waiting for the rent to arrive in your bank account.
Assess your priorities, as not having the time doesn’t mean you can’t invest in property. It might mean that you ask a lettings agent to find you a tenant and then manage the property on your behalf.
Buying and renting out a property could be a fantastic opportunity for you and a “good investment”. While you will of course be looking online and asking friends or relatives, it’s important you speak with the property experts. My colleagues and I are here to help if you if you need us. Feel free to call into our town centre offices in Bolton and Bury, give us a call on 01617611215 / 01204381281 or email us at [email protected].
