Should you invest in Buy to Let?

According to the ARLA (Association of Residential Letting Agents) Member survey of the buy to let sector for Q3 2007, average rents have increased in almost all areas of the UK since spring 2007. Also, the average period that buy to let properties are vacant for, is at its shortest for 5 years.

Are buy to let properties therefore a great investment?

The averages certainly look favourable. So what should you consider before you enter this market. The first research you must undertake is to look at yourself: What is your attitude to risk? An underlying belief in the continued long term growth of property value is one thing, making mortgage payments on a second property if you struggle to find a tenant, is another.

How do you think you would feel if you were in that situation?
Would paying this mortgage impact on your lifestyle?

Putting your money into property will mean that you do not have fast or easy access to it should your circumstances change. It can take some time to sell a property if you need to access your capital, and depending on the mortgage deal you put in place at the outset, there could be financial penalties if you change your mind.

What attracts you to owning further properties?
Do you have a strategy in place?

There are certain skills and a good level of resilience that successful property investors have in common. For instance they rarely become emotionally attached to investment property. They will set a budget, negotiate and walk away from the deals that don’t stack up.

Think about whether you are the right person to invest in property. Do you have the capital, the patience, and the ability to live with a level of risk?

You can speak to an adviser who will help you reach the answer to these questions, before you view any “potential” properties. It can save you time, money and heartache!

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