Things to think about before investing in buy to let property
Investing in buy to let property can be a way to diversify your portfolio of investments, provide regular income and potentially be a source of capital growth.
House prices increased by an average of 5.8% in the year to September 2016, meaning that residential property continued to outperform many other types of investment.
However, investing in buy to let property isn’t suited to everyone. There are risks, costs and responsibilities associated with owning a property that is rented out.
If you are considering investing in buy to let property, it is essential that you understand and are comfortable with the following points:
access to money – property is not a liquid asset as it takes time to access your money when it is sold
house prices – slower growth could mean that you don’t receive the capital growth you anticipated when you sell the property
profit is not guaranteed – making a profit is not guaranteed, even if your property increases in value. Property is relatively expensive to buy and sell when you consider stamp duty land tax (SDLT) and professional fees.
When it come to buying your first home, everything seems really complicated. Don’t take the wrong mortgage advice, read our independent guide to successfully getting onto the property ladder.
Home buyers have saved money on stamp duty following the rule changes in December 2014. People are saving but they are reluctant to switch their savings accounts. And, we look at some of the tax and regulation changes that will come into effect in 2016.
Investing in buy to let property can be a way to diversify your portfolio of investments, provide regular income and potentially be a source of capital growth.
