There is obvious appeal in buying a property to rent and for many people, this is considered a great way to create regular and additional income.
Good properties to rent are in high demand and as with all property, the value will increase over time. However, there are things to consider before investing.
Even in a fluctuating market, property is still considered a safe investment, plus the rent you can charge should be more than the monthly mortgage costs, so you will start making money straight away. There are deals to be had with a ‘buy to let’ mortgage and some costs can be offset against tax. However, the tax regime has changed significantly in recent years and you will need expert advice in the context of your own personal circumstances and your property purchasing plans.
When deciding to buy a property, whether to rent, or live in, you will need to organise a property survey. Online conveyancing specialists such as https://www.samconveyancing.co.uk/ can advise you as to the best survey for your circumstances.
Brexit is being blamed for the recent dip in sales seen by the property market which may be an short term advantage for purchasers.
There will be times when the property is empty and therefore not earning you rent. You will also have to advertise the property and ensure that it is maintained and meets regulations. If you already own a property, you will need to pay an additional 3% stamp duty.
If you decide to manage the property yourself, you will need to make sure you are available in the event of a problem, for example, a broken washing machine. It will then be your responsibility to get it fixed. If you choose to hand the day to day management over to a letting agent, then some of your income from the property will go to pay the agency fees.
If you apply for a buy to let mortgage, you are not allowed to live in the property, or even stay there temporarily. This is a rule stipulated by the Financial Conduct Authority and there is no way around it. So if you wish to buy a property to rent with the option of living there yourself in the future, you will need to apply for a regulated mortgage.