Many landlords are taking advantage of the cheap mortgage interest rates and rising home prices at this time to expand their property holdings and increase their portfolios. The majority of landlords (79%) believe they will still be landlords in five years, urging more first-time landlords to enter the market now than ever before.
Real estate investors looking to make long-term investments in property are more likely to gain from the market’s potential for capital growth. From 2022 onwards, capital growth is predicted to increase in almost every city in the United Kingdom, with the North of England being the most notable exception. The population of the United Kingdom is continuing to rise, and there are not enough dwellings for everyone.
Is There an Increase in Rental Yield?
The average rent on a newly rented home in the United Kingdom increased by 4.4% in March 2021 compared to the same month the previous year. Outside of London, rents have increased by 6.8% each year on average. Verismart, a property management business, predicts that renters will account for 55% of the housing market by 2045.
With these changes, the buy-to-let market is a solid investment opportunity for investors to acquire homes with great potential. If you want to ride this wave in the real estate market, here are three tips you should consider before considering a Buy-to-Let investment strategy:
1. Invest in Rental Properties That Appeal to TenantsÂ
Since the pandemic, the kind of properties that tenants are searching for have altered. People have expressed a need for more expansive living spaces as a result of the lockdowns. More important than access to transportation are a garden and a spare space for a home office. Additionally, more than 90% of renters aged 25 to 34 believe the number of bedrooms to be a deciding factor.
2. Consider the Rate of Return
To cover the cost of mortgage repayments, maintenance, continuing fees like as insurance, and any unanticipated charges, you should aim for a return of at least 7%. Calculate your rental yield before investing in a buy-to-let property. This is the profit you’ll generate from rent after deducting the purchase price and renovation expenses.
3. Decide On The Ideal Location First
Outside of the commuter belt, buy-to-let investors may find homes to invest in. One of the most significant consequences of the pandemic and subsequent lockdowns is that renters’ preferences have shifted. The property market in the North East is now flourishing, with a high demand for rental units. Newcastle’s population is growing, and over 14,000 new employment are predicted in the next 12 years.
ConclusionÂ
Purchasing a buy-to-let property is more difficult than relocating to a new home, since there are numerous specific legal and financial ramifications to think about. This is why many potential investors seek help from experts in the industry. A conveyancer will examine if there are any limitations that would prevent you from renting out a house. They can help you with planning approval, lease agreements, health and safety, and ongoing maintenance, among other things.
To make a successful buy-to-let investment, it is essential to get qualified professional guidance from the beginning of the process. Whether you are a first-time homeowner or not, working with a knowledgeable and experienced solicitor or conveyancer is essential for a successful transaction. They will make certain that all aspects of the transaction go well and that the transaction.
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