Wednesday, 1 December 2010

Buy-to-let is still a safe bet

As 2010 draws to a close, we are urging those with money to invest in the New Year to consider buy-to-let as a viable medium to long term investment.

Landlords with buy-to-let properties can expect an increasingly good return on their money as the rental market is predicted to remain strong.

There is currently a real undersupply of rental property, and this is unlikely to change in 2011 with massive demand remaining which will push rents up further.

With interest rates so low and an increasing lender appetite, a buy-to-let property can be an excellent investment. For example, a property which costs in the region of £185,000 can generate a yield of as much as eight to ten per cent a year. This is a great return and far better than any bank or building society can offer.

Those looking to invest in buy-to-let property should also be prepared to look further afield. We would advise investors to consider looking outside their immediate locality when considering buy-to-let properties, as there are areas in the country with some great returns to be had which can offer excellent yields.

We have a large network of both sales and letting branches and are happy to offer guidance.

Investors should always take advice from a reputable lettings agent accredited by a professional body such as NALS (National Approved Lettings Scheme) or ARLA (Association or Residential Lettings Agents).

A good agent will ensure that the property is looked after and well managed, and so the area of the country in which it is located should make little difference.

The yield is calculated by taking a property’s monthly rental income to give the annual rent and dividing this into the purchase price of the property. Of course, it is important to take into consideration such things as mortgage set-up fees, stamp duty and other costs associated with the purchase of a property. Even so, with the rental market so strong a buy-to-let property is a good investment.

In many areas rental properties are being snapped up in less than 24 hours such is the demand, and this will continue to remain the case the foreseeable future.

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