The Buy-to-Let Market: Some Things You Should Know as An Investor

The middle of last year was steep for property investors in the UK as most people were uncertain about the future of the market following Brexit. However, the market remained sound and has since continued to rise steadily.

The property market has maintained its fluidity in the new year, but experts believe that sales may slow down as a result of the economic situation in the country. Not too long ago, the buy-to-let market came under a tax review but many people still see it as an opportunity in a time of low interest rates and fickle stock markets.

Opportunities in buy-to-Let

People with enough capital to place a significant deposit in a buy-to-let property will find it a suitable source of income. Especially now that interest rates are low and the capital market is volatile.

Many new investors have been encouraged by the comparatively buoyant, profitable market to grab opportunities in housing, with the hope that the value of property will appreciate.

Record low mortgage rates are also helping buy-to-let investors make promising deals. However, it’s also important to be wary of low rates because they’ll surely rise- and your investment must be viable enough to buffer the increase.

This year, there’s a tax rise coming, and a 20% tax credit will replace the interest relief of the buy-to-let mortgage. Also, landlords are expected to pay an additional 3% stamp duty on property purchases.

Nevertheless, the buy-to-let market can be a lucrative one, just as long as you ensure that you do the right thing. Here’s an essential guide to property investment and being a savvy landlord.

1.       Research the buy-to-let market

Like any other business venture, you should do your homework before you jump into the buy-to-let bandwagon. How well do you know the market? Are you aware of the benefits and risks? What type of income do you want?

The buy-to-let market is a steady, albeit long-term source of investment income. If you want a short-term financial fix, you may be better off property flipping. Do all the necessary research about the workings, regulations and tax laws in the buy-to-let industry, so you can make smart decisions anytime.

2.       Invest in a favourable area

When starting out, it is advisable to first choose lucrative areas for buy-to-let investment. Only more experienced risk-prone investors can afford to start in unfamiliar territory.

There are places people are more likely to move to as tenants, due to certain factors. Other factors include proximity to good schools for their children, great restaurants, grocery stores, and a thriving work environment.

You’ll need to match your budget with the kind of property or area you want to invest in. Ensure it’s the kind of place people would like to choose.

3.       Think about your target renter

Smart landlords have a profile of the kind of tenant they want to live in their property. Put yourself in their shoes and try to see what it feels like to live in your buy-to-let property.

Who are they and what are their preferences? Where do they work? Are they single or married with children? Having an empathetic view will make you a better landlord, not just for interactive purposes, but business-wise. A long-staying tenant is great for business.

As the new year begins, nobody can say for sure which direction the property market will go or which deals will yield the best returns. However, only smart investment decisions will ensure your risks are reduced, and profits are maximised.

Remember to always keep up with maintenance, make your property a nice dwelling place, and foster a good relationship with your tenants.

Article source: The House Shop