Buy To Let: Better Than Ever

Good news for all buy to let property investors in the United Kingdom many properties are priced out of reach of first-time home investors, interest rates have increased and the number of repossessions has soared. Now more than ever, with more people opting to rent despite the rising rental prices, buy to let investments have become very profitable and have become highly in demand.

With the demand for properties in some areas escalating faster than supply can keep up, the rental prices naturally rose as well. This shortage in rental properties is definitely a positive sign for landlords, as not only can they demand a better rental price for their property, it is now also easier to obtain tenants. The rise in rental prices is also brought about by the high and restrictive interest rates and the caution of many mortgage providers in giving out loans. Because of this, many would-be home buyers would rather opt to rent a home in the meantime before they actually purchase one.

Economists have predicted that this phenomenon of the rapidly rising rental price would lead to a new crisis. For many, it has become too difficult to purchase their own home and with the high demand for properties for rent, even the price of rent is often not easy to afford. Demand for rental properties is on the rise, while the supply remains more or less the same. While this is definitely unfortunate news for many tenants and for people seeking rental accommodations, landlords welcome this turn of events.

There are many new ways to finance your buy to let property investment other than a straight buy to let mortgage with a deposit from the investor. Offered since the nineties, buy to let mortgages involve lending money to an investor to purchase a property to rent out to a tenant. Despite the fall of popularity of buy to let mortgages in recent times, however, investing in property for the purpose of renting it out is still a secure investment, nevertheless.

The key to a successful buy to let investment is to purchase a property in the right location and to locate a good tenant. Choose a property in an area where most of your target market would like to reside. The ideal tenant is someone with a steady income but not enough wealth to purchase his own house. Though most landlords are able to manage properties on their own, sometimes a letting agent helps. Especially in the legal aspects of property investment, letting agents can side step potential problems before they actually happen.

Many would-be sellers are now holding on to their property investments, preferring to rent them out rather than to sell them. Developers are also cashing in on the trend, building homes and purchasing residential properties, specifically for the purpose of renting them out to families. Buy to let has become the most feasible option for many property buyers in choosing a long term investment. With most people opting not to immediately buy their home but to rent instead – and with rents rising - purchasing buy to let properties can be a profitable and lucrative investment.

By: Parmdeep Vadesha

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Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - www.Property-System.com