Good time for buy to let?

With rents rising as many youngsters can’t afford to have their own place, buying to let looks like a sound investment. But beware of the many pitfalls, which we outline below.

Buying to let must be considered a long term investment, not a way of getting rich quick. It can be stressful and time consuming dealing with tenants and letting agents, and there are times when the property might be empty too, and you’ll have to pay for the mortgage with your own savings.

If the value of houses continues to fall then many owners will find themselves in negative equity, when you owe more for your mortgage than what the property is worth. However this must be balanced against increasing rent prices, which are expected to keep rising as many youngsters are priced out of the property market.

Think of a location and type of property that will provide a good return rather than invest in a property you yourself would like to live in.

Kate Faulkner, author of the Which? Guide To Renting & Letting, says: ‘Go to a lettings-only agent, who should be more than happy to brief you on the types of properties that are easy to let and how much rent you can expect.'

If you want students, think that they will want to live near a university, while families would want to live near good schools, young professionals near a train station.

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