What is Buy To Let
And How Does It Work?

A question I'm often asked by would-be property investors is:

‘What is Buy To Let, and how does it work?'

So I've decided to put together this introduction to the world of buy to let...

Buy to let first became popular in the mid 1990's when investors with cash to spare, took advantage of the property market slump in the UK and snapped up cheap properties. To this day, the mid-90's still remains the best time to have invested in a buy to let in the UK.

So, what is buy-to let?

A buy to let property is solely an investment, bought for the purpose of renting it out, though with a buy to let property investment you have two ways of potentially making money:

First, by achieving a monthly rental which exceeds your costs

and

Second, by keeping the property over a long enough period that it rises in value.

This all sounds like easy money, but before you head off and buy a property, there's a whole lot more that you need to consider.

Please read my Buy To Let pages where I give you a more detailed picture of the buy to let market both now and in the mid-90's, as this is a good introduction and gives you lots to think about.

To give you a complete answer to ‘what is buy to let', I need to tell you about all the other costs and issues you will need to face as a new landlord.

You need to consider all the costs involved in actually buying the property. So this would be: solicitors fees, surveyors fees, stamp duty, mortgage arrangement fees.

Then you need to get the property ready for tenants. So this could involve: decorating, buying appliances, furnishing, curtains, carpets, having gas and electricity inspected and certified, to name just a few.

Then you need to get yourself a tenant! Do you find one yourself? If so you have advertising costs, if not you'll have a finders' fee to pay.

After all of these costs there's still more! Property tax is going to further eat away into your profits.

Does buy to let still sound so attractive?!

I hope I've answered all your questions regarding ‘what is buy to let'. Please follow the links above for more info and do of course Contact Me if there's anything I haven't covered here.

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