Buy to Let Property
Buy to let property has become one of the driving forces in many peoples finances in recent years. This has happened for a number of reasons.
- Buy to let mortgages are widely available. Building societies and
banks were falling over themselves to lend money to property buyers. While this has slowed recently, buy to let mortgages are still available if you have a good deposit.
- Interest rates are low meaning you can borrow a lot for average buy
to let mortgage payments.
- Mortgage companies have tightened their lending rules, however you can
still borrow at reasonable rates to provide a rental
income.
- Insurance companies are providing specialised buy to let policies
for buy to let landlords, covering property and buildings insurance,
and tenant insurance.
- Government is increasingly changing its pension policy and legislation in mid term, as well as at a change of government, so that many people do not trust pensions as a secure method of providing finance in their old age. Property is seen as a much more secure long term investment, and buy to let property pays for itself if you buy at the right price and have a god deposit.
For some or all of the reasons above, buy to let property purchase is steadily increasing, and is maintaining the buy to let property market. These market conditions have been developing and changing in the UK, Ireland and slowly throughout Europe and the US, however but to let property is always worth considering when planning your finances.
What is Buy to Let Property?
Buy to let property is property, usually housing, that is owned for rental purposes. It is especially common in the UK, but is available in many developed countries.
The important feature in defining buy to let property is that it is usually owned by families as a means of providing extra income, rather than large commercial enterprises. There are exceptions, of course. Some people buy one property and expand the portfolio as cash for deposits becomes available. This can result in ownership of many properties over a period of time, but great care needs to be taken that the buyer is not financially overstretched.
Owning and managing buy to let property can be a part-time interest or a full time job and main source of income. It is essential that the owner doesn’t get carried away with the process of property acquisition. Just because it is possible doesn’t make it a good idea. The buy to let property owner must allow financial room for fluctuation in national economics and personal fortune.
Buy to let property ownership can form an important part of the owner’s investment or retirement plan. As with all financial options, it is usually best if buying buy to let property is one part of a mixed strategy. Put all your eggs in one property basket and you may regret it.