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Property Investments - Buy to Let

Tuesday, 12th April, 2016

In recent years, the stock market has had its ups and downs. Add to this the serious loss of public confidence in the pension funds as a means of saving for the future and it is not surprising that investors have looked elsewhere.

The UK property market, whilst cyclical, has proved over the long-term to be a very successful investment. This has resulted in a massive expansion in the buy-to-let sector.

Buy-to-let involves investing in property with the expectation of capital growth with the rental income from tenants covering the mortgage costs and any outgoings.

However, the gross return from buy-to-let properties - i.e. the rent received less costs such as letting fees, maintenance, service charges and insurance - is no longer as attractive as it once was. Investors need to take a view on the likelihood of capital appreciation exceeding inflation.

Factors to consider

Do

  • think of your investment as medium to long-term
  • research the local market
  • do your sums carefully
  • consider decorating to a high standard to attract tenants quickly

Don't

  • purchase anything with serious maintenance problems
  • think that friends and relatives can look after the letting for you - you're probably better off with a full management service
  • cut corners with tenancy agreements and other legal documentation.

Investing in a buy-to-let property is not the same as buying your own home. You may wish to get an agent to advise you of the local market for rented property. Is there a demand for two bedrooms flats or 4 bedroom houses? Or perhaps properties close to schools, local amenities or transport links are more appealing in your area?

At Cunninghame Properties we can advise you on the types of properties to purchase, as well as the standard of decoration and furnishings which are expected.





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