Buy to let
A buy-to-let is a property purchased with the intention of renting it out to tenants. You can make a hefty profit as an investor of a buy-to-let property, you just need to make sure you plan appropriately and weigh up the income with the costs. It’s also fundamental that you seek tax advice before you take the plunge.
Successful buy-to-let investing is not without its issues. Like all investments, there are risks associated with buying-to-let. Increased taxes, greater regulation and higher costs are the new realities of today’s private rented sector.
To assess whether a buy-to-let property is a worthwhile investment, you should look at things like rental yield and potential capital growth.
Rental yield measures the ongoing return on investment for a property. You should always consider your potential rental yield before purchasing a buy-to-let.
Capital growth, also known as capital appreciation, is the amount that the property increases or decreases in value over time. This is normally due to changes in the property market or improvements to the property. Working out your potential capital growth can help you decide what work to do on a buy-to-let and when could be the best time for you to sell.
Whilst purchasing a buy-to-let property has its challenges, at Preferential Properties we can help you to understand the issues and work with you to build a successful property portfolio.