COULD A BUY TO LET INVESTMENT BE YOUR NEST EGG?
Since opening 5 years ago, we’ve seen a shift in the type of landlord with a buy to let investment. Typically, people expect a buy to let landlord to own a portfolio of properties, with vast amounts of experience in property and finance. But interestingly, we’ve found a new type of landlord, someone dipping their toes in to the water, looking for something to run alongside their pension.
Dwindling pension funds and poor returns of savings has helped the buy to let market boom! Low mortgage rates combined with affordable housing is making the daunting step to become a landlord that little bit easier.
Despite the ups and downs, property is relatively consistent and we’re fortunate that our stunning county, Shropshire, has not seen the drastic price crash that the North East has suffered, or the extreme boom that London has seen.
I mentioned in my previous blog, landlords who were fortunate enough to buy a 3 bed in TF12 in 2014 would have experience a 4.8%. If you were to travel just 3 miles from TF12, you can purchase a 3 bed property from as little as £70,000 and achieve £550 per month that equates to a 9.4% gross yield! Generally with a higher yield comes higher risk, but managed well, that risk can be reduced.
To get anywhere near a consistent 4% per annum return on your savings, banks would expect you to tie up your money with them for 10 years in some cases!
When looking at property it’s important to consider your goals, is it to receive an income, the potential of capital growth, or a little bit of both. What is your plan?
We’ve let and managed on great deal of properties over the last 5 years and we’ve dealt with properties valued between £50,000 up to £850,000, I’d like to think if you need guidance on where to buy, how much for, and what you could expect of that property, then we’d be your first port of call.
In my opinion, buying right, letting well and managing properly, property can definitely be your nest egg.