Busting the Myths of Buy to Let Property Investments

Property Investments

Potential property investors can be cautious if they are still yet to take their first step into a property venture due to hesitancy in the market as a result of negative reviews that may taint their decisions.

Being blinded by blatant myths is a common occurrence. Achievable returns, the money you require to get started and the so called ‘risks’ involved in building a property portfolio stir speculation and controversy, all of which ought to be dispelled with the right research and knowledge.

“Now is not the right time”

On the whole, there is never a bad time to invest in property. Of course, the price you pay for a property can fluctuate depending on the market, and mortgage interest rates and the rent you pay are constantly shifting. Tax regulations and legislations can tighten, but this just means you need to keep a watchful eye of shifts and trends in the current and forthcoming economy.

Employing a strategy that is suitable for the market conditions and seeking helpful advice is always a good place to start, particularly if you are looking into the future.

“Capital growth and nothing else”

Our macro-economic climate consistently changes forming peaks and troughs in the property market. It would be naïve to state that property prices are always set to increase, but you can always rely on the market staying buoyant when it comes to selling.

Buy to let offers a longer-term strategy, and while capital growth is on the minds of most discerning property investors, these types of properties have the potential to produce a secure income, often serving as a key focus.

RW Invest, property investment specialists based in Liverpool suggest,

“Regional growth aims to make transformational changes to help cities flourish and offer higher rental returns for investors encouraging capital appreciation.”

To view a wide range of buy to let investment opportunities across the UK, click here to find out more: https://www.rw-invest.com/uk-property-investments/.

Keeping cash flow high gives stability and provides investors with added protection against any setbacks that may arise. Increases in interest rates, spikes in legislation costs and void periods are all unavoidable at some point.

“I’m not wealthy so I can’t invest”

All prosperity is relative and depends on your definition of ‘wealthy’. The UK and property go hand in hand as the rise in regeneration initiatives across the country offer the opportunity for masses of new builds and steady investments within the housing market. Surging numbers of property investors are entering the market on average incomes but yet still build profitable portfolios they are proud of.

Taking the first steps into property can be as a result of numerous factors, by leveraging existing equity in their home or accessing hard earned savings. Another alternative is buying off-plan which requires securing a property with an initial deposit at a price agreed ‘today’ but not yet settling the full amount until completion. Staggering payments can make this more affordable for those who cannot commit to a large upfront total payment.

However, be sure not to over commit yourself and maintain a level of financial responsibility, particularly as a first-time investor.

“I’m looking for a property below market value, so I receive a guaranteed profit”

The bottom line is this is totally dependent on the market value and whether the value was slipping below the line or exceeding its value at the time. For example, if a property is purchased below market value at the height of a boom in the market it can still present a poor investment choice as further decreases in the market value would instigate a major drop in overall property value.

During a period whereby the market is thriving, it will generally be more difficult to achieve higher discounts because of the number of potential buyers in the market and the high levels of demand. In contrast, during a fall in the market, there will be a decrease in buyers and a myriad of properties for sale.