Buy to Let Property Investment
There has been a huge growth in buying buy to let investment property over the last few years. A number of economic factors have encouraged the growth in buy to let property investment:
- low interest rates and increasing property values, allowing many house owners to release equity from their family home and re-invest it in a second buy to let property or a holiday home in the sun
- investing in buy to let investment property due to fears over pensions and low share values
- parents have also bought buy to let properties for their children at university, so that the rent from fellow students pays the mortgage
- investment in holiday or second homes, where rental values can pay for the mortgage, thus the owner gets a free holiday and rapidly increasing assets
Television programmes like "Property Ladder" and "Place in the sun" have increased awareness of buy to let property investment and holiday rental properties, and many people think they can become a property tycoon overnight. However, if you do not know what you are doing, the buy to let investment property market can be a dangerous one.
The directors at New Homes Direct have personally invested and renovated properties for rental. However, although it is possible to increase the value of the property significantly, it is a time consuming and difficult job, with a steep learning curve (unless you employ a project manager). Investing in off plan or discounted new properties does take a lot of the time and risk out of this process. This is particularly important in the current economic climate where rental values will not always cover the interest payment on the mortgage - making it very difficult to get a buy-to-let mortgage.
Buy to let mortgages
By purchasing a buy to let property that has already had a market evaluation, the buy to let mortgage has been secured. In addition if the property is bought with a discount then this hedges against any fluctuations in the property values. New Homes Direct have partnered with two brokers who offer excellent deals on buy to let mortgages and "Investment Finance"
You can also find out more from the "Nationwide Buy-to-Let Microsite."
