In Demand: Buy to Let Properties
Copyright (c) 2008 Parmdeep Vadesha
Despite the looming economic uncertainty and the rise in housing prices, 2008 ushers in a high demand for buy to let properties in the United Kingdom. As houses become continuously more expensive to home buyers, many would opt to rent rather than to purchase their homes at this time. Many new families or first time home buyers are feeling the housing crunch, and would rather rent in the meantime while they save money to buy. This, however, heralds in good news for the buy-to-let investor, as demand for rental properties increase.
Though some economists express concerns about the global property market and rise in inflation rates, buy to let investors are not fazed. Many of those investing in buy to let are using the high housing prices to their advantage, and finding ways to benefit in the marketplace. For many first time buyers, it is quite difficult to break into the property market and buy their first home because of the high level of upfront cash deposit needed upon purchase. This is why many would rather rent than buy.
The buy to let market is thus a viable investment that offers the prospects of very attractive yields. Purchasing a property and then letting it out is a secure and profitable medium to long-term investment. However, the key to a successful buy to let investment is two-fold: the right property and the right tenant. As with all property investments, the trick is always with the location. Find the right property in the right area. More importantly, choose a property in an area where there is a good chance of securing a long-term tenant. A good tenant of this kind is someone who has a steady source of income, but not rich enough to purchase a house of his own. Finding this kind of tenant is indeed a jackpot for the buy to let landlord, as he would have consistent rental income to pay off his mortgage on the property and make a profit.
Though it is usually wise for a landlord to manage his buy to let property portfolio on his own, the use of a letting agent is also a good idea. Letting agents are especially useful for legal questions, as they can provide expert advice and find ways to prevent the landlord from getting into difficulties should there be conflicts with his tenant.
On a final note, one key aspect that a landlord should consider is rent. Especially for properties located in prime and popular areas, landlords are often tempted to ask for a very high rental price. Especially when there is a high demand for the property, increasing the rent is a good idea. However, it is wise to do this in between tenants. If the property has been rented out for years by the same tenant, a sharp increase in price would not necessarily be a wise move. Put a premium on loyalty and on cultivating long-term relationship. Most especially if the tenant is an unproblematic one, it would be best to charge a sensible rental.
Despite the looming economic uncertainty and the rise in housing prices, 2008 ushers in a high demand for buy to let properties in the United Kingdom. As houses become continuously more expensive to home buyers, many would opt to rent rather than to purchase their homes at this time. Many new families or first time home buyers are feeling the housing crunch, and would rather rent in the meantime while they save money to buy. This, however, heralds in good news for the buy-to-let investor, as demand for rental properties increase.
Though some economists express concerns about the global property market and rise in inflation rates, buy to let investors are not fazed. Many of those investing in buy to let are using the high housing prices to their advantage, and finding ways to benefit in the marketplace. For many first time buyers, it is quite difficult to break into the property market and buy their first home because of the high level of upfront cash deposit needed upon purchase. This is why many would rather rent than buy.
The buy to let market is thus a viable investment that offers the prospects of very attractive yields. Purchasing a property and then letting it out is a secure and profitable medium to long-term investment. However, the key to a successful buy to let investment is two-fold: the right property and the right tenant. As with all property investments, the trick is always with the location. Find the right property in the right area. More importantly, choose a property in an area where there is a good chance of securing a long-term tenant. A good tenant of this kind is someone who has a steady source of income, but not rich enough to purchase a house of his own. Finding this kind of tenant is indeed a jackpot for the buy to let landlord, as he would have consistent rental income to pay off his mortgage on the property and make a profit.
Though it is usually wise for a landlord to manage his buy to let property portfolio on his own, the use of a letting agent is also a good idea. Letting agents are especially useful for legal questions, as they can provide expert advice and find ways to prevent the landlord from getting into difficulties should there be conflicts with his tenant.
On a final note, one key aspect that a landlord should consider is rent. Especially for properties located in prime and popular areas, landlords are often tempted to ask for a very high rental price. Especially when there is a high demand for the property, increasing the rent is a good idea. However, it is wise to do this in between tenants. If the property has been rented out for years by the same tenant, a sharp increase in price would not necessarily be a wise move. Put a premium on loyalty and on cultivating long-term relationship. Most especially if the tenant is an unproblematic one, it would be best to charge a sensible rental.
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