Is Buy To Let A Good Investment?

Is buy to let in Camberley, Chobham, Fleet and Yateley a good investment? That’s a really good question, for so many different reasons...

Firstly, what makes a ‘good investment’?

What are the hallmarks of a ‘good investment’?

Secondly, is buy to let a ‘good investment for you’, personally speaking?

Just like the word ‘good’ is a concept for discussion, so is whether a good investment works for you. Thinking about it further, what does investment actually mean?

These are exactly the type of questions you should be asking yourself if you are thinking of becoming a buy to let investor in Camberley, Chobham, Fleet and Yateley. They will help you shape your future if you do become a landlord of residential properties.

Here, the team at Waterfords will look at what makes a good investment when it comes to property.

 

What does a good investment look like?

First ask yourself: What do you want a good investment to look like?

It might be that you have a little money in the bank, or you want to use some of your savings as a deposit for a buy-to-let mortgage. The rewards from a property investment will certainly outweigh leaving the money in a standard bank account. That’s great on the face of it, but what are you investing for? Do you want to get a return in terms of a good rental income, or are you thinking long term when the property you buy could be worth a lot more money giving you the option to sell and profit later on?

So, think about your reasons for investing and what you want to get out of it.

 

What does good actually mean?

What does ‘good’ mean when it comes to looking at a ‘good investment’ in property?

It might be that you’re looking at capital growth (your property rising in value) or it might be that ‘good’ means a good rental yield. This means that you get a solid return on your money through the rent you get back.

To calculate the yield, divide the annual rental amount by the property value and then times that by 100. This will give you the rental yield. A good yield varies depending on where the property is located, but you should be looking at around six percent or above. To decide whether your investment is good, make sure everything adds up. Your rental income must at least cover your costs.

 

Is the property right for a good investment?

To answer this question, you’ll need to consider whether the property is in the right area for it to do well when it comes to finding a good tenant.

• Is it likely to soak up some of your funds because it needs a lot of repairs and maintenance to bring it up to scratch?
• You may understand that it needs work, and you may have budgeted for it, but if you exceed your budget, will this still make it a good investment?

Try and keep your emotions out of it. Buying and renting property should be based on business decisions. Plan, and then plan some more.

 

Is it just a money investment?

There is more to buy to let than just investing money. Finances are imperative but it’s not the only factor you should be thinking about.

• Can you afford the time to be a landlord?
• Can you invest thinking space and dedicate hours to make sure you are on the right side of the law?
• Do you have the time to invest in doing any maintenance or repairs?

Being a buy to rent landlord is so much more than merely buying a property and waiting for the rent to arrive in your bank account.

Assess your priorities, as not having the time doesn’t mean you can’t invest in property. It might mean that you ask a lettings agent to find you a tenant and then manage the property on your behalf.

Buying and renting out a house could be a fantastic opportunity for you, but you must do your homework. While you will of course be looking online and asking friends or relatives, it’s important you speak with the property experts. In Camberley, Chobham, Fleet and Yateley that’s us and we would love to help you as you start your journey.

 

The benefits of owning a buy to let property

Owning a buy to let in Camberley, Chobham, Fleet and Yateley and renting out your property can be very rewarding. It can be a way of having a regular income coming in, together with actually owning something that should increase in value over time.

If you are considering renting out a property, there are many things you need to make sure you get right, such as rental income, statutory obligations (e.g. gas and electric certificates), and of course having the right tenants in-situ.

 

What are the benefits of a Buy To Let?

1. You’ll have the option of a Buy to Let mortgage

Unless you can fund your property purchase with cash, the chances are that you will need a buy to let mortgage. For landlords, this is the most popular way of acquiring property, which in itself can benefit you in a number of ways including:

• Interest only payments
• Longer mortgage terms
• Mortgage payments can be offset against tax
• Less strict regulatory processes

The good news is that there are a number of products and lenders out there to choose from, and you should be able to get a good deal from a lender.

If you have a larger than average deposit to put down, for example around 35 to 40 per cent, then the deals get even better.

Consumer website which.co.uk has some very useful information on mortgage deals worth looking at, and of course as your local estate agent we are happy to help and put you in touch with a recommended mortgage adviser who will assist you with lending criteria and affordability.

 

2. You’ll get potential high returns on your money

When you own a rental property, you should benefit in two ways, financially speaking. Firstly, you’ll have a monthly income stream coming in. If you’ve done your sums right and have a rental income that produces a good yield, then this is good news.

Secondly, you should see your property price go upwards over the years. Despite everything, property is still seen as a sound investment. We know for example that as soon as a rental property in Camberley, Chobham, Fleet and Yateley is marketed, then we get a huge number of enquiries.

Top Tip Do your homework. If you need help making sure everything adds up, talk to us and we’ll do our best to help you.

 

3. You’ll diversify the risks

It’s fair to say that the economy has taken a battering over recent months. High street shops and large businesses have come a cropper because of lockdowns and uncertainties over investment going forward. Where previously you may have been certain of your other investments, perhaps now there’s an added element of risk.

If you have a few pounds stashed away in various projects or investments and are worried what the future might hold, property in Camberley, Chobham, Fleet and Yateley is still seen as a sound investment with good returns. Again though, you must do the maths and look at interest and repayments and make sure the rental income covers not only fixed costs, but also maintenance and the other expenses associated with rental properties.

Top Tip Seek the advice of a trusted lettings and property expert to find out which areas will present the best opportunity for rental incomes.

 

4. You can help friends and family

We’ve seen a trend recently of people investing in buy to let properties as a way of helping friends and family out, while at the same time building up a property portfolio.

It’s an interesting concept and will not be for everyone but if you know someone going to college or university, it could be a way of generating useful cashflow.

Top Tip There are rules and regulations that tenants and landlords have to abide by whether your tenant is someone known to you or not! It’s probably even more important to get it right if you rent to friends or family as you won’t want conflict in the future.

 

Want to know more about buy to let?

These are just some of the benefits to owning a buy to let property. There are many things to think about, so if you would like some expert help, do give us a call and we’ll talk you through it. Waterfords Estate Agents are your local property experts for the Camberley, Chobham, Fleet and Yateley area.

Camberley: 01276 66566

Chobham: 01276 858589

Fleet: 01252 623333

Yateley: 01252 870222
 

CLICK HERE to email us.