It is no secret that making money through having a buy to let property isn’t as easy as it used to be. The government have decided that the time has come to crackdown on the taxes of landlords who have invested into a buy to let property. This has led to a reduction in the amount of people who buy a property to rent out. So much so, that the investment put into a buy to let property has dropped from £25 billion to just £5 billion in the last two years.
Does this mean that buy to let as we know it is over? We are not 100% sure that this is entirely true. However, if you are thinking about buying a property to then rent out then you are going to keep a few things in mind.
The negatives of buy to let
Whilst we don’t want to think negatively of buy to let, it is sensible to consider some of the drawbacks. One of the first things to consider is that if you are investing into or buying a second property then you will have a 3 per cent stamp duty applied to the purchase of the property.
As well as this, there has been a removal of the wear and tear allowances for landlords and a phase out of the higher-rate tax relief on mortgage interest payments too.
All of these things come together to mean that a buy to let property isn’t quite as profitable as it may once have been.
There are some positives still
As the name of this blog suggests, it is not just about the negatives of this particular investment. For those who are looking to secure a buy to let mortgage, then they can find that the interest rates applied to this are much lower than they may realise.
In fact, the average five year fixed rate has fallen to 3.43% which is a record low, joint with October 2017. By shopping around you could even find a better deal than that.
When it comes to making money, the yield for rental properties can be more impressive than you may think. Depending on the city that you decide to invest in, the opportunity to make money can be as much as 9 per cent. Of course, this only applies to certain cities around the UK, which means that you should take the time to research into the cities that are going to offer you the very best reward.
Finally, one of the main things to think about when it comes to buying a property that will then be let out is that if you take your time and shop around, you can find the very best for your money. It may take a little effort to bring it back to its best, but we know, with the right property and the right tenant, being a landlord is still a truly attractive idea for many people looking to make money.
