Why Buy-To-Let Properties are a Good Investment

Is now the time to become a Buy-To-Let landlord for the first time or to expand your existing portfolio?

Published in Market Insights on 12 July 2024 by our Marketing Team

With a stable housing market and the likely mortgage interest rate reduction in the near future, buy-to-let properties can be a good investment for a variety of reasons, from earning a passive income to helping to meet the ever-growing demand for rental properties.

The Benefits of Buy-To-Let Properties

There are an array of benefits associated with buy-to-let investment; they include, but are not limited to:

Property is a relatively safe investment
You will earn rental income
The demand for rental properties is high
You can generate capital growth
You can choose to be hands-off

Property is a Relatively Safe Investment

A benefit of investing in a buy-to-let property is that property itself is a relatively safe investment.

Although house prices fluctuate, investing in property has historically been perceived as a safer, less volatile investment than stocks; for instance, investors can experience excellent returns, a passive income, and tax advantages when investing in property.

You Will Earn Rental Income

A key benefit of investing in buy-to-let property is that you’ll earn rental income. Typically speaking, you’ll receive rental payments monthly. The ‘average up 10-15% on the same time last year’, highlighting how much you can earn as a landlord.

As an example, the typical rental property in Lincoln will now rent for the following Per Calendar Month figures.

2 Bed Terraced House £900 PCM
3 Bed Terraced House £1000 PCM
3 Bed Semi Detached House £1100 PCM

The amount you can earn depends on the internal condition of your buy-to-let property, and you’ll be taxed on your earnings in accordance with your income tax banding. That said, you can earn a decent amount of income from a buy-to-let property.

The Demand for Rental Properties Is High

A key benefit of investing in buy-to-let property is that the demand for rental properties is high.

With the rise in house prices and overall shortage of available rental properties, the demand for rental property is showing no signs of slowing down in the near future.

As fewer people can afford to buy houses, buying a buy-to-let property can be a good investment to help meet the demand and will subsequently be easy to rent out with rental returns at an all-time high.

You Can Generate Capital Growth

Investing in property provides an immense opportunity for capital growth. In fact, UK house prices are forecast to rise by 3% in 2024, emphasising how property is still a great investment in 2024. Buyers could see their investment in a buy-to-let property grow significantly over the next few years.

Additionally, if you decide to sell your buy-to-let property, the market value of your property could be much higher than what you purchased it for.

You Can Choose to Be Hands-Off

Lastly, a benefit of investing in buy-to-let properties is that you can choose to be a hands-off investment.

With many private landlords wanting to spend their time with family and friends, handing over the day-to-day management and responsibilities to Pygott & Crone will make the lettings process hassle-free. By choosing to be hands-off, you can earn a passive income with significantly less work than is required when managing your own property.

Lettings agents’ fees can be offset against your Tax return, making the managing agent a financial benefit.

For further information and to discuss the local buy-to-let market, contact our local Pygott & Crone branch on 01522 518293.

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