What Are Buy-To-Lets?
With Buy-To-Let (BTL) investments you invest in a property or properties with a view to letting them out under one single let tenancy where you will typically have an individual, couple or family renting the property. You remain the owner of the property and receive a rental income. You are able to purchase buy-to-lets using your cash reserves or by taking out a mortgage. To gain a mortgage you will require a cash deposit.
It’s possible to achieve favourable returns from buy-to-let investments. In 2018 the average yield achieved by landlords in the UK was 9.6%. This compares to a 12.5% fall in the FTSE 100 stock market in 2018 and a typical interest rate of 1.4% on cash ISAs. There is currently great demand for rental properties in many areas of the country. You could also benefit from capital growth by investing in a buy-to-let, property prices can fall in the short term but historically have risen over the longer term.
At Modus our experts source properties in targeted areas of the UK. These may not be the most affluent areas or those with the lowest property prices. We seek investment opportunities where there is a high demand for rental accommodation and where it is possible to achieve the best yields. This could mean that your chosen property is not in the region in which you live. We have professionals in each region to manage the process including the letting of the property.
Some properties will require renovation or re-purposing. We will help you to decide how best to present the property. This could mean that the most profitable strategy is to convert a house into a House in Multiple Occupation (HMO). We have teams in place to carry out all of the required work.
Pros and Cons of a Buy-To-Let
You will receive a regular income for as long as you have tenants in place but this income is taxable. You could also achieve capital growth as the property could appreciate in value.
As a landlord you will have to devote your time and energy to managing your buy-to-let, alternatively you can let Modus manage it for you through our Hands Free Property Investment service.
Whilst our hands free service will include arranging any necessary repairs and maintenance you will remain responsible for financing the costs.
Buy-To-Lets are a long term strategy and are not a suitable choice if you are looking to generate cash quickly.