Over the course of our lives, many of us will think about purchasing a buy to let property, in this article we will explore what Buy to let properties are, debunk some regular myths and assess the pro and cons of buying one.
There are many different types of mortgages available to you, but for those seeking to develop a passive income stream through the rentals market, a buy to let mortgage may be an option. Simply put, a buy to let mortgage is a mortgage that is sold specifically to people who are looking to buy property as an investment and let this out to other people as opposed to a mortgage for their own personal use.
If you are planning to rent out a new property or consolidate an existing property portfolio, the majority of lenders will prefer you to use a buy to let mortgage instead of a standard residential mortgage to finance your purchase.
Buy to let mortgages are a useful tool for both seasoned investors with an existing portfolio of properties as well as new landlords looking to take their first steps into the rental property market, as effectively you have someone paying you rent which helps repay the amount you have borrowed from the mortgage provider with the potential goal of the property becoming yours at some stage in the future, however interest rates and deposits required are often higher than a standard residential mortgage for those considering a buy to let mortgage.
There may also be potential tax benefits and tax implications for anyone with or thinking about purchasing a buy to let property as well as the cost of upkeep and maintenance and seeking professional advice from a suitably qualified tax agent or professional is a must for anyone considering this route.
In summary, many people like the prospect of buy to let properties and the attraction of having an investment in bricks and mortar with the goal of a passive income and property ownership, once the mortgage is paid off.
Understanding the buy to let process and engaging the different professionally qualified that will be needed to help guide you through the various steps Involved becomes a critical exercise for anyone looking to pursue this option.
*Our article does not offer financial advice or recommendations and the content above is for information only.