Buy to let – not quite as simple as it looks
If we discount the weather as an indicator, the British summer has arrived, so that means the silly season has arrived aswell, as oft they go hand in glove with one another.
Even if you have stopped buying newspapers, you will no doubt have seen a overabundance of articles on the buy to let market. It would appear that Buy to Let investor are now more favoured that first time buyers, and Nat West have been advertising some very attractive deals
Housing prices in most areas have been reduced this year and the levels of income nationally from rental properties is mostly growing steadily. It would be hard to imagine better conditions for entering into the buy to let arena. But all is not well in the economy here and elsewhere. And it’s better to be careful.
Although inflation is down slightly this month, it remains very high, and there is no doubt that whilst it might not be next month or even this year, interest rates will rise at the earliest opportunity.
It is also very uncertain there. Just look at the recent U.S. tightrope in the debt ceiling. And who knows what else will manifest itself from our other EU partners, there is no doubt we have not heard the last from the like of Greece, Spain and Italy. Some commentators are openly predicting the demise of the euro. There are certainly more difficult to arise.
One thing that all smart business people value, that is certainty, it helps to make a solid plan. However just at this moment the one thing we don’t have is certainty. So in the context of Buy to Let, if you are considering entering or making any Buy to let investments, caution and shrewdness is advised.
There are certainly some good Buy to let options out there, but do not fall under the hype. BTL is not a dead cert, and it is up to you if your investment is sound. Above all, it has never been more important to study the local market where the property you want to buy is and make sure the rental demand is strong.
Mostly the people who run into difficulties with Buy to Let are those who have not done their homework. They ran headlong into cheap property only then to find out why they had not been snapped up already: it simply wasn’t the place that prospective tenants wanted to live. Of the two major components in Buy to let, the actual purchase of the property is the simple part, actually letting is out and getting tenants can be surprising tricky for the novices.
