You have probably heard the buzz words “buy-to-let” recently. So many people are deciding to try their hand at renting property as an investment.
The problem is that most of them don’t know how to go about this the right way.
Times have changed and investors need to learn new strategies to experience success. The good news is that I’m going to let you in on an important secret. You can use this information to turn your rental properties into a lucrative investment.
Are you curious yet?
Well, read on
First, I’m going to discuss some of the current changes in the 2007 buy-to-let market.
I know you’re anxious to find out the secret, but I don’t want to make it too easy. Besides, it’s important to know about these changes; they play an important role in the world of buy-to-let investing.
The current high property demand has been influenced by the following factors:
High European Divorce Rates
Fragmentation Of Families
Increasing UK Population
Less Council-owned Properties
Mobile Workforce Expansion
Huge Increase In Immigrants From EU Countries
Very Low Interest Rates
More Lenders Offering Buy-To-Let Mortgages
This has resulted in a huge increase in the price of UK property. In fact, prices actually doubled from 1998 to 2002!
Renting property as an investment also involves many costs such as maintenance, service charges, furniture, property tax, tenant deposit schemes, property management and buy-to-let house insurance. Every investor who chooses to play the buy-to-let game has to pay these costs.
So what is the main difference between successful investors and ones who fail?
Location! Location! Location!
I can’t emphasise this point enough. Many people purchase local property for convenience. Unfortunately, this isn’t usually the best choice.
Experienced investors are more interested in an area where the numbers stack up for the investment rather than owning a property near to where they live.
So what’s the big secret?
Consider investing in Northern England and Scotland!
The reason is simple: prices in these areas are currently below the national average with yields of approximately 7-8%.
In this part of the country property is still affordable for first-time buyers.
Also the enlargement of the European Union has fueled demand for rent. A large number of people from Central and Eastern Europe have recently moved to Scotland. As you can imagine, this is great news for the buy to let investor as demand for property exceeds supply, fueling the capital growth.
Did you know you can still buy a one bedroom flat for 45,000 pounds with a rent of 300 pounds per month giving you a healthy return of 8% yield.
I have personally moved all my property portfolio from the south of the country to the north because of the high capital growth anticipated for at least the next five years.