Why There Has Never Been A Better Time To Invest In A Buy-To-Let Property

If you are considering an investment in a buy to let property in Mansfield or the Sutton in Ashfield area, in our opinion there has never been a better time to do so. There are three main reasons for this:

1) Affordable property prices

Despite the meteoric rise of property prices across the country, and recently in the East Midlands in particular, there are still some fantastically affordable homes available in the area. Well-built, two and three-bedroom terraced houses in and around Mansfield can be found on the market from as little as £50-£60,000. Semi-detached family homes can still be secured from £90 to £120,000. This offers incredible value to families looking to move into the area, especially for professionals commuting to Nottingham, Sheffield or Leeds. As a buy to let investment, a local property will set you back far less than the equivalent in the south of the county. Furthermore, with prices in the area set to rise over the coming couple of years, investors can expect an impressive gain in equity when they come to sell on their property.

2) Availability of new properties

The East Midlands is in the fortunate position to be somewhat sheltered from the ‘property drought’ affecting some parts of the country, especially London, the south-east and north-east areas of England. In these areas, demand for property is outstripping the number of new houses that are becoming available on the market. On the one hand this is further bolstering house prices in the regions affected, but it also has the potential to trigger a slowdown in the rental market, as potential tenants choose to buy property themselves rather than pay increased rents. Therefore, for a buy to let investor, a ‘property drought’ is a very mixed blessing. Currently, the housing market in North Nottinghamshire doesn’t show any signs of this problem, with plenty of high quality, affordable housing coming available to keep up with demand.

3) Best ever yields from buy to let properties

Perhaps the most compelling reason to invest in a buy to let property are the incredible returns available from this kind of investment at the moment. According to industry averages published in January, average returns for landlords in England and Wales have increased by 12% since January 2015. In terms of money in the bank, this is a nationwide average of £21,988 gross income over the past year (before mortgage payments, maintenance cost and other deductions are taken into account)

With the financial prospect for landlords looking healthier than at any time for two years or more, and with plenty of affordable and desirable properties available, now is the time to consider your buy to let investment. As prices begin to creep up again after the winter slow down, the sooner you make your investment, the higher returns you are likely to yield, both in terms of increased equity and income from rents.

The Buy-to-Let Property

The Buy-to-Let Property

If your goal is to have future security that allows you to retire comfortably, buy-to-let can provide a solution. Of course, like any property investment, all of this market’s aspects must be considered.

Unlike owning a personal home, owning a buy-to-let property means that you are a business owner; a landlord who provides housing to tenants. This type of property ownership comes with its own set of legalities.

HMOs

HMO stands for ‘house in multiple occupation’. This type of arrangement is one of the most popular forms of buy-to-let property investment. The HMO property is one where three or more people live in one home and share amenities such as the home’s kitchen and bathroom. These properties exist in both small and large sizes. A large HMO is one where five or more tenants share the amenities in a building that’s at least three stories in height. Although this type of tenancy is most commonly associated with students, it is also becoming increasingly popular among the young professionals market in London, Nottingham and other British cities.

This option demands that particular legalities are adhered to. For example, as a landlord, you will be expected to regularly check certain vital aspects of the building, such as electricity, fire and gas safety. You will also need to ensure that the property’s number of tenants remains at a reasonable level. In addition, you will need to ensure that all facilities, whether for washing or cooking, as well as any communal areas are always clean and in sound working order.

Usually, an HMO does not require planning permission if you wish to convert it to a personal dwelling in future unless it has been classified as a large HMO.

How to Invest in Buy-to-Let

Once you’ve reviewed the list of buy-to-let property for sale near you, you can make your investment with personal cash or opt for a buy-to-let mortgage with a deposit of cash. Any investment into a buy-to-let property also means carrying a mortgage. However, it’s important to note that mortgage payments remain due whether or not there are tenants occupying your building.

Earning a Profit

Investing in buy-to-let property can earn you a profit in more than one way. You can earn money through capital growth as well as through rental yield.

Capital growth refers to the profit earned when a rental property is sold for more than an investor paid for it. Most commonly, it is rental yield which offers the most lucrative way to earn profit. This is the rental payments received from tenants, minus the cost for repairs and running the building.

Additional Costs

In addition to the cost of purchase and maintenance, buy-to-let properties also incur stamp duty, land tax and survey and solicitor’s fees. Fees will also be incurred by letting or sales agents. Marketing fees may also apply should you choose to sell your property.

In order to secure your investment, you may decide that taking out a landlord’s insurance policy as well as buildings insurance are both good ideas. Both offer protection for you and your investment.

Before you commit to purchasing a buy-to-let property, it’s crucial to ensure that you’ve thoroughly researched things like consumer protection so that you know what is and what isn’t available to you as a landlord.

www.wabarnes.co.uk