BTL property can be a minefield or it can be extremely lucrative. But it’s not for everybody. Here’s what some of our clients say about the highs…and the lows
- For many it’s win-win. They get a regular income from rent, above their monthly mortgage payments, AND their property could appreciate in value. House prices in Surrey and Hampshire have risen more than 10% in the last year. Can this trend continue? (We can’t be sure of whether it will or won’t – what do YOU think?)
- Releasing equity to provide a deposit for a Buy-To-Let property has worked for many.
- Tax Benefits…. Mortgage interest, letting costs, buildings insurance, repair bills and many other things relating to your BTL property can all be claimed back as expenses and offsetting the tax bill against your income. (We can give you the basics, but an accountant can really help you with this stuff!)
- BTL with your new-found pension freedom? With this year’s new pension freedoms, cash can now be taken from a pension pot and used for BTL property.
- The property itself is the golden goose. If the value rises, investors remortgage, release some of the equity and put it down as a deposit for another property. That’s how they build up their portfolio.
But bear in mind –
- Success in this market means holding onto your properties for a long time – 15 to 20 years or more. Are you willing to stick with it?
- Can you strip all emotion from the equation, which means that you buy only what makes sense mathematically? This is easier said than done!
- Do you have the edge to win the property you want against the competition? Can you face the consequences of purchasing the wrong type of property in the wrong area?
- How good are you with risk? The housing market involves risk. House prices can crash, tenants can cause trouble and there are potential rental voids. Combine these with with maintenance costs and management fees, and profits can be hit!
- Do you have a deposit of 25%? This is the point at which the numbers start to make sense for most.
So, is Buy to Let for you? The first step is to take professional advice. There are many Buy-To-Let lenders who only deal through brokers, so it makes sense to have a chat and see what the options are…we love nothing better than doing all the maths for you! Seriously…we really do love working this stuff out & making sure that what you’re doing is right for you….even if that means doing nothing!
Your property may be repossessed if you do not keep up repayments on your mortgage.
You can choose how we are paid: pay a fee, usually 0.75% of the loan amount or we can accept commission from the lender.