Should you invest in a buy-to-let (BTL) property?

12Feb2019

Should you invest in a buy-to-let (BTL) property?

If you are someone who is just starting out on their investment journey or have several years of experience in the investment game wondering whether to choose a buy-to-let mortgage, you‘re in the right place. Probably you’ve heard ‘buy-to-let’ an umpteen number of times, but here’s what it’s all about and why you should be interested in it as an investor.

In simple terms, buy-to-let means you purchase a property specifically to let it out or rent it out. A buy-to-let mortgage is a loan that helps you fulfil this process. Here are some good benefits that a BTL investment will get you.

1. Reliable

Investing in a property can be one of the most reliable forms of investments for you. It’s an asset that you can easily understand, comprehend and control as you gain experience. Not to mention that it’s a reliable way to begin investing if you’re someone just beginning your portfolio building journey and short on expendable capital.

2. Grow your income doubly

This is probably why buy-to-let investments are great for you. Firstly, they earn you rental income from the tenants. Secondly, you earn more in terms of capital growth. Though the capital growth and rental income may vary depending upon where your property is located, housing is a primal need for people. Despite sways in economy, housing has proved to be a resilient asset class.

3. Steady income

Unlike the previous decades, people are more into renting out properties. It’s a growing trend and the popularity that owned homes enjoyed in the previous decades is being replaced by a growing lifestyle and culture transformation which is perfectly okay and seek properties to rent out. Given you find tenants for your property, there is going to be a regular flow of income with less chances of void or gap in your letting out period.

4. Helps build a diverse portfolio

Ask any experienced investor, he’ll sing the praises of maintain a well maintained, balanced and diverse portfolio. And BTL investments help you to attain that. Not only does it add value in addition to other assets that you hold in your portfolio, but BTL investments can also ensure that you receive steady, predictable source of income.

Here’s a bonus point. . .

The capital gains and rental income that you earn from your BTL property is not based on how much you have paid out but it’s based on the total current value of the property. This means that you’re making profits out of money which is not still yours completely.

Not to mention that BTL mortgages for HMO properties is also possible. An HMO property or a House in Multiple Occupation property is a property rented out by at least three people not belonging to the same household. For example, bedsits, shared houses, lodgings, hostels etc come under this. This could again mean an advantage from an investor’s point of view as it potentially gives you to opportunity to expand your portfolio and earn more income.

We at GPS Finance have had the opportunity of helping many people like you build their journey to financial freedom. Our experts can help you find the best mortgage deals, increase income for you and add value to your portfolio. To know more about how we can help you, visit http://gpsfinance.co.uk/

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  • 12 Feb, 2019
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