“Is buy-to-let still worth it?” Hardly a day goes by when someone doesn’t ask us that question.
For a lot of people, the answer is no. Changing lettings law and tax rules have caused many landlords to drop out and sell up, particularly if rent is their main or only source of income.
But here’s the thing: many private landlords are still actively expanding their portfolios, and large corporations are starting to invest heavily in rental homes. So why is that?
Well, they’re embracing change, and forward-thinking investors are building strong and profitable strategies around the new factors affecting buy-to-let, including:
Another huge change in the lettings world is that almost half of landlords are now aged 40 or under. So let’s look at how a new generation is planning a bright future with buy-to-let.
Getting a mortgage on a rental property has changed a lot, and you now need a minimum of 25% as a deposit.
That can be a barrier for both first-time and existing landlords, but there are also advantages and ways around it.
So although all the talk is about the death of 95% buy-to-let mortgages, most investors don’t borrow at that level anyway, and having less debt makes for a more solvent business.
Demand for more efficient homes keeps increasing through a combination of higher energy bills and greater climate awareness. And the good news is that demand always equals opportunity.
So from an ethical and financial standpoint, there’s a win-win for everyone: increased rent for landlords, better homes with lower bills for tenants, and fewer carbon emissions.
The Renters (Reform) Bill was introduced to Parliament on 17th May 2023 and aims to make it law that every rental property is comfortable, warm, efficient and safe. Is that so bad?
It is for investors with poor-quality homes, but it’s also an opportunity for responsible landlords to start or expand their portfolios for less money.
Finally, the Bill will make it easier to get your property back from tenants who cause damage or stop paying rent - a major step forward from the current very flawed system.
Buying to let is no longer a get-rich-quick scheme, but being a landlord is still a sound way to build long-term wealth, a legacy for your retirement, or plan inheritance tax.
All of these combine to make a solid foundation of reliable investments to create a secure financial future for you and your family.
It’s no coincidence that large institutions are getting in on buy-to-let - they see pound signs. And while their strategy will include economies of scale, there is another way.
Tenants want more than copy-and-paste homes, and private landlords can use that to their advantage by cultivating the natural attraction and loyalty towards independent businesses.
What’s your next step?
If you’d like to join the next generation of landlords and build long-term wealth with profitable rental homes in the Wilton & Salisbury area, we’d love to help.
Call uson 01722 580059 or email us at firstname.lastname@example.org for a friendly, expert chat about the local market and demand, and let’s start making plans!
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