Property investment can undeniably be a means of securing a stable and profitable income. However, with some headlines often perceived as focusing on a tenant friendly society many are put off. Whilst there are undeniably risks associated, as with all investment opportunities, should you have the right professionals on your side it can work very well for you. Below are some of the pros and cons of investing in a buy-to-let property.
• Despite fluctuating house prices, property has proven to be a relatively safe long term investment with prices most likely to increase.
• Currently, mortgages can be obtained at relatively low rates and fixed for long terms. Despite low mortgage rates, rents remain high and therefore the return can be substantial.
• With many agents providing various types of management you are not limited to purchasing properties in your local area and therefore can purchase in low-cost areas.
• There are many options for landlords insurance covering an array of eventualities, including guaranteed rent, minimising the effect of the risks associated with buy-to-lets.
• The possession procedure can be lengthy and costly, however as long as you instruct the right legal team to assist you and have complied with all of your obligations from the outset, this does not need to be an arduous task.
• Should the property be empty at any time you will have to cover the mortgage payments. However, as stated above, mortgage rates can be set at very reasonable amounts and some agents provide a guaranteed rent for any period a property is vacant.
• Since 1 April 2016 there are increased stamp duty land tax rates for buy-to-let properties. However, with potential for high profit margins in the buy to let market the additional stamp duty can often be quickly recovered.
Whilst there are considerations to be had for the risks associated in property investment, the benefits can be great. Provided landlords comply with their legal obligations and work with the right professionals to limit the risks and guide them through any difficulties, property investment can often be a fruitful source of income.
Do not hesitate to contact the specialist team at Paul Robinson Solicitors LLP on 01702 338338 or [email protected] for more information.