Unlike other investments which are passive forms of income, making an investment in buy-to-let involves starting up your very own business and requires a great deal of time and attention.
If you haven’t got a great deal of savings behind you, this doesn’t necessarily mean that you can’t make an investment in the buy-to-let industry. Instead, you may opt to take out a small loan to get up and running. An advisor may be able to take a look at your savings and work out whether you are in a position to take on an investment of this nature.
Once you have made the initial investment, you will then go on to earn an income through the rent paid by tenants (minus any outgoings needed to keep on top of the maintenance of the property as well as any agent fees).
Are there risks involved?
As with any investment, there are slight risks involved with buying-to-let. The amount of rent you charge isn’t down to personal preference and will all boil down to the current market, so you need to be sure you are able to spend such a large sum of money on the property initially. Be prepared for any instances where a tenant cannot pay their rent on time, or even at all. Similarly, you may find tenants who prove very difficult and will ramp up your repair costs if they happen to find anything they aren’t particularly happy with. It may be a struggle to find tenants within the first few months, which can be a common occurrence amongst prospective landlords.
It is not all doom and gloom though. If you find that renting is proving too difficult, you could wait for a boom in house prices to go on to sell the property and earn back what you initially invested.
Are buy-to-let investments safe?
As mentioned, all investments involve a slight element of risk, but when it comes to the actual property, there are ways in which you can protect your assets, such as holding the relevant insurance to ensure you are fully covered.
Talk to us today to discuss your investment objectives in more detail.