The buy-to-let business model is fairly self-explanatory. You buy a property and then let it out for rent. It’s important to note there are certain requirements you need to meet in order to be eligible for a buy-to-let mortgage. If you spend your money wisely, you’ll be able to make a profit from your investment. Why should you consider trying buy-to-let?

Safe Investment 

Generally speaking, property tends to be one of the safest investments you can make. Houses can increase in value as time goes on, plus there will always be demand in the market. However, even though housing is a safe investment, it’s still important for you to get landlord insurance. It can cover property damage and guarantee rent will be paid. You won’t be living in the house so you want to do everything you can to make sure your investment will be protected. 

Location, Location

According to a survey by Total Money, location can make a world of difference with the buy-to-let yield. The yield is essentially the profit. To work it out you look at how much rent you’re being paid a year, and then take away mortgage payments you’re making. Areas with dense student populations are good places to look out for. There will be a constant demand for housing so it takes away the risk of not being able to find tenants to fill your property.

Generate Income

When you rent a property, the tenants can pay your mortgage for you. If you have a low buy-to-let mortgage, it allows you to make more profit. Your monthly payments will be lower, and allows you to make more money from the rent you’re charging. Your property can generate money for you, and it could lead to letting out more places – creating a profitable cycle for yourself. 

Limited Company

If you are looking to invest in several properties and create a portfolio, you should consider doing so as a Limited Company. This comes with a number of benefits, which mainly stem around taxes. For instance, if you buy-to-let as a Limited Company, there will not be tax on your retained profits. You can re-invest in more places with the money you’ve generated from other properties. 

2020 Impact

Covid-19 impacted every sector imaginable and real-estate was no different. However, if you’re able to, you could take advantage of the current market and invest in property now. The price of housing is lowering and the demand for rental places is increasing. Buying a house at a lower cost than normal means you can make more profit in the future. 

Holiday Home

Another way 2020 has impacted the property market is the increase in popularity in staycations across the UK. If you own a holiday home, you could consider renting out and making the most of this current trend. Holiday homes can be a solid investment.

If you’re smart with your buy-to-let mortgage, you can reap in the rewards. Remember it’s not just money you’ll be investing, but your own time and effort. Would you consider investing in a buy-to-let mortgage?