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Buy to let property investment strategies

There’s a plethora of buy to let investment strategies out there with most being easy to learn but difficult to master. Some common sense required but it’s making sure that you have the knowledge about a property to make the most of your returns

Buy-to-let has been around for decades with the phenomena really introduced in the 80s but really taking off from the 90s. Fundamentally, the concept is simple enough, an investor purchases a home and allows a tenant to live in the property under a contract and for a set duration. The home owner collects a specified rent payment under the agreement. That’s it. 

For an investor looking for buy-to-let homes, you need to decide on a number of factors to make sure that you can secure your property. Making a payment for our property can be done via mortgage (normally of the buy-to-let mortgage kind) or stumping up the full payment in cash.

Depending on how well you can save, trying to put up a lot of money upfront is not always a convenient option for most. It’s a painfully slow method to save money and not always realistic in the long run bearing in mind people’s lifestyles and many necessities.

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MORTGAGES

When it comes to financing your property investment, mortgages are most likely a better option or specifically a capital repayment mortgage, effectively using your property as a savings plan. By renting out your property, the mortgage is ‘paid’ via the rental payments generated by tenants. If your rent rate is more than your monthly mortgage payment, it may leave some money in the bank (although realistically, some money can go towards the upkeep of your rental property). Regardless, the mortgage is effectively being paid through rent. Once an investor is free from the mortgage term, it’s then up to the homeowner to continue to let out the property (collecting yet more money only 100% goes straight into the bank!); sell up (hopefully collecting any appreciated value!), or use the property as residence.

You can probably see why Buy to let is so highly attractive to an investor!

Other Property Options

An investor can also consider buying a below market value property. In short, these are properties that are sold below the current market rate usually because the owner is looking for a quick sale. Investors are recommended to do their own due diligence but BMV properties are a good cheaper option and can be a decent wealth generator with the right property.

Another strategy for serious consideration are off-plan properties. These properties, when built in the right area, easily accessible transport links, and with the right developer, can generate fantastic capital appreciation during the construction term and rental income. Off-plan new builds with all the modern layout, fixtures and fittings that you would expect and can dazzle prospective new tenants.

LETTING Service

There’s more possibilities then the single let option.  Another question to ask is how many tenants will be able to occupy your property at one time. It may be possible to partition rooms for House Sharing and add additional bathrooms if there is potential or if that’s what you require. The HMO (Home with Multiple Occupancy) primarily is about finding the right property and managing an additional budget. Be sure to review your landlord responsibilities to ensure that any property modifications are fit for purpose and safe for multiple tenants. If you’ve got these points covered then you’ll be able to reap additional cash flow from a single property. Obviously, a downside is you’ll need to keep more than one tenant happy and this throws up entirely new issues than single lets.

Areas with major universities and colleges typically have HMO accommodation on tap for students. If this is something an investor is considering, the rental yields would be steady and predictable as tenants come in during set university term times. Bear in mind that property in areas where student amenities are close at hand are more attractive than a property that requires a 30 minute bus journey into campus.

Buy to let property is a great entry point for any new investor. It can be a relatively simple way to get up and running quickly in property investment. It can give you a solid foundation accumulating wealth and building up that all important property portfolio. Be aware that property markets and trends are in constant flux, going through plenty changes, so it’s best to keep up to date with all things buy to let during your research. Look into landlord rules and regulations where available. Do your due diligence, look at any potential investment prospects from all angles and you could be on your way to making a healthy return on investment.

Be sure to speak with our consultants who would be happy to assist you in finding the right property for you. Just contact us using our phone number (+44 (0) 203 911 5892 or +1 (646) 908 2628) or use our contact form here.

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