Friday, 23 March 2018
With 1.75 million landlords currently operating in the UK, buy-to-let investments are becoming increasingly popular. But why is the lure of becoming a landlord so strong?
High Return on Investment
The possibility of a high return on investment is one of the main draws of becoming a landlord. Between 1996 (the year buy-to-let loans became available) and 2013, the per-year returns for a buy-to-let investor who purchased their property with cash averaged 10%. And where the investor bought with mortgage of 75% of their property’s value, the average per-year return over the period came in at an impressive 16%.
The combination of being able to cover mortgage repayments as well as generating an income through rent make buy-to-let a very enticing investment indeed.
Long Term Investment
Although property prices go up and down, a property’s value will inevitably rise over a number of years. This means that, as well as generating income through rent, landlords are highly likely to make a profit when they eventually sell a property.
Building a Portfolio
Another advantage of buy-to-let investments is the ability to scale up your operation and grow a portfolio of properties. Although this needs to be carefully planned and managed, landlords who start small and grow sustainably can make excellent returns from letting multiple properties.
Top Tips from our Experts
Howkins & Harrison’s Lettings Manager, Mark Bazeley, shares his top five tips for anyone considering a buy-to-let investment:
- Know which tenants you are targeting and invest in property that will appeal to them
- Research rental “hot spots” to find out where demand for rental accommodation is highest
- Don’t rely on rising house prices – make rental income a big part of your return
- Don’t take risks by scrimping on tenant checks and inventories
- Start small – don’t overstretch yourself
Want to know more?
If you’d like to know more about making a buy-to-let investment, our property experts have the skills, knowledge and expertise to advise and guide you through the process. Call your local Howkins & Harrison office to find out more.
Rugby: 01788 564666
Northampton: 01604 823456
Daventry: 01327 316880
Atherstone: 01827 718021
Towcester: 01327 353575
Lutterworth: 01455 559203