Maybe buy to let investing has fallen out of favour in recent years. Some new investors have taken a wait and see viewpoint. While some existing landlords have decided to exit the market wholly or completely.
The property market is an ever changing market however. It’s true to say that as one door closes another door opens. So now could be a very good time to consider if it is time to get back into buy to let.
Interest rates are on the way up. (It’s still pretty cheap to borrow money though.)
Government policy isn’t very landlord-friendly anymore. (Signs are that a watershed might have been reached though.)
The Renters Reform Bill is creating a lot of uncertainty for landlords. (But who knows, it might offer some benefits to landlords.)
Changes to the rules on EPCs could create problems and expense for landlords. (Again there could be opportunities for investors here.)
The rising cost of living is likely to mean that more tenants will have difficulty in paying the rent.
Property prices seem to be softening in some places. (Softer as in not rising at meteoric rates.) So there could be good buying opportunities ahead.
Rents are rising …. and very sharply in some areas. Most expert forecasts suggest they are very firmly on an upswing too.
Yields are strong and rising in many places. They potentially offer a very good rate of return compared to other types of investment.
The prospects for longer term capital appreciation are still pretty good. Many forecasters are suggesting 10+% or so over the next five years.
There is a huge demand (and a huge shortage) of rented accommodation in many places. New lets let almost immediately and sometimes at ‘offers above’ the asking rent.
Tips for getting back into buy to let
Consider the type of let you want to get into carefully. Target types of lets which offer the highest yields. For example student, HMO or holiday lets as well as just vanilla buy to let.
Flexilets are the new name in the buy to let game. A flexilet could be, for example, a holiday let during the summer and then a short term let for the rest of the year.
Choose properties and areas carefully. Target places with the best yields and the best demand. Select properties and areas where demand is not just good but high.
Don’t just guess. Analyse the numbers behind the deal in detail to make sure the numbers add up. Use a deal analysis tool like PaTMa Property Prospector for example.
Take good financial and legal advice. Get advice on the best mortgages. Get advice on whether a limited company would make your business more tax efficient.
Think big. By having several or many properties – if not now then eventually – you benefit from economies of scale in buying and running that single-property landlords don’t benefit from.
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