Buying a Property and Becoming a Landlord
Applying for a mortgage when you are planning on renting out the property in question is a slightly different prospect in that the interest rates are generally a little higher. It’s also possible that the fees may be higher than standard mortgage fees and you may also have to put down a larger deposit. Hmmm, all sounds a bit depressing doesn’t it? Well, it’s actually not as bad as it sounds.
When you are purchasing a property as an investment, you look at things slightly differently. Generally (but not in all cases) it’s a long-term investment. Perhaps you don’t have a great pension or maybe you are simply looking to boost your income at retirement age. As the old saying goes; You can’t go far wrong by investing in property.
Property has always increased in value over time. So, it makes sense that a long-term investment plan will yield a good return. It’s difficult to see how any other measured investment will yield more.
Who Can Buy a Property to Let?
You can get a buy-to-let mortgage if:
- You want to invest in houses or flats.
- You can afford to
- You already own your own home, whether outright or with an outstanding mortgage
- You have a good credit record and don’t have huge debts elsewhere
- You earn £25,000+ a year. You’ll struggle to find a lender if you earn less than this
- You’re under a certain age. Given the fact that most mortgages run for 20-25 years.
Buy to Let – A Good Investment?
It’s a matter of affordability balanced against return and long-term growth. Investing in property is not as risky as the stock-market for example. There are high risk investments and there are not so high risk. If you are buying to sell on in two or three years, then the investment is classed as short-term and a higher risk option. It cannot be guaranteed that the property will increase in value and indeed it may decrease for a while. So, you have to understand that and be okay with it.
As a long-term investment, property is a great option and a buy to let mortgage, whilst a bit more costly, is worth the little extra.
