A Brief Introduction To
Buy To Let
How property investors
benefit from the
residential letting market!!!
What Is Buy To Let ?
Buy to let
is the initiative of the Association of Residential Letting Agents (ARLA) with the support of mortgage lenders
and it is designed to help private individuals to invest in property that is to be let to tenants. The
strong presence of these professional, bonded letting agents has led to a change in lending criteria and
the lowering of interest rates for private investors.
The Housing Act of 1988 de-regulated the rental market and provided a legal framework for both landlords and
tenants. De-regulation along with changing work patterns has brought about tremendous growth in rented housing.
Why Buy To Let ?
As working patterns change and people become more mobile, demand for rented property and short-term
lets has grown significantly. In recent years, the gap in the market has been filled, increasingly, not by
big landlords but by individuals buying one or more properties in addition to their own home. These additional
properties are a
buy to let
investment and they are let to tenants to cover the cost of the loan that was raised to buy them.
Property is an excellent long-term investment with the potential to offer good income and
good growth. Capital growth in property in the past 25 years has exceeded almost any other investment
type.
Although this cannot be taken as an absolute indication of the future of the property market, property values
are still on the increase in most areas.
Many people invest in
buy to let
property as a pension, since the monthly rental income can be used to supplement retirement income,
or alternatively, the property can be sold and the proceeds used as a nest-egg for use in retirement.
What Are The Risks ?
As with all investments, the value of a property can go down as well as up and unforeseen structural
problems can prove expensive. However, if you pick the right area and are realistic about returns, you
can reduce the risks.
Rental income can also vary. If the market is saturated with rental properties, your annual income
may remain static or even fall. You need to build a margin into the rent to allow for periods when the
property might be empty between lets (average 4 weeks) and to cover maintenance costs.
Summary
OK, that's the end of this introductory section on
buy to let,
and I hope you found it to be informative.
The Blue Cherry Knowledge Base library contains a lot more 'free to all' advice and information on the property
investment business. In addition to this introductory content, however, we also provide more in depth
advice and information on the subject of
buy to let
and all the other topics listed in the library, including details of our own methods of operation, and some of
the strategies we apply. This more in depth, valuable content is freely available to those who subscribe to our
free E-Course by simply registering a first name and an e-mail address with us.
What's Next?
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our money to pay the up front costs of buying your investment properties, you can
do so now by sending an email to support@no-money-down-property-advice.co.uk
and type the word INTERVIEW in the subject box.
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buy to let
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