Buy to Let in the UK: Still a Profitable Industry?

The influx of subdued stories about the property market in the UK has led many to wonder if investing in a buy to let is still wise. However, experts have always touted the strength that property has shown for over a long period of time.

With all the unenthusiastic stories going on about the UK property market and predictions of a possible decline in prices, many people are wondering if it is still worthwhile to invest in buy to let property. As gloomy as the outlook may seem to be, the good news is that the property market has always proven that it is capable of outperforming other investments such as the stock market over the long term.

Buy to let investing has frequently been touted as one of the most straightforward ways of investing money and during excellent market conditions the investment can become a highly lucrative one. The typical dream for buy to let investors is this: You go to a property auction, buy cheap property and get tenants who pay the rent, which you use to pay for your mortgage dues on the property. In a span of ten to fifteen years, the property has been fully paid for by accommodating tenants, you have a considerable steady income from rent or you can choose to sell the property for a huge profit.

Since buy to let has sometimes been flaunted as a gateway to easy money many people have rushed in to join the fray. But now as mortgage rates rise, buy to let investors are discovering that what started off as a profitable move is now becoming quite the opposite in some areas. This may seem like rational grounds to steer clear of buy to let property investing. However, if you are in the right position, you will find that there is money to be made in property – often it is big money.

So why is now a good time to invest in buy to let in the UK? Because property prices are declining and investors who buy now can buy well below market value from distressed sellers. In comparison, novice investors buy property at steep prices which does not only reduce their ultimate yield but leave them susceptible to mortgage rate changes. When it comes to purchasing property, the professionals in the field of buy to let know that property auctions have always been good places to find bargain properties.

At present, property auctions are witnessing an increase in the number of buy to let and repossessed properties. The more properties there are, the lower the selling prices will be. The number of people going there to make purchases may have declined but those who are left are the shrewd investors looking to reap the rewards of investing in buy to let even in a stabilising market.

Here are some ways that buy to let investors can make money from property investing:

1. Buy repossessed property.
As earlier mentioned, property auctions are places to find cheap property and repossessed properties are one of them. But if you want a better way, you can try finding owners of such property and work out a deal with them before the auction. This strategy does not require you to pay cash since most of the time you can purchase the property using no money down financing as long as the rentals sufficiently cover the mortgage payments. Aside from buying a property at a cheap price, you are also helping stop somebody from getting repossessed.

2. Buy derelict property in good locations.
Look for depressed areas that are situated near a good school, those near the seaside, a flourishing municipality, or a property with proximity to London or other chief cities and sought-after places.

3. Buy property for renovation.
A lot of people, particularly a handyman or a contractor, can earn good money from refurbishing property. You can earn profits by purchasing rundown property at a good price but make sure that there is a way for you to add value to it. Have the property repaired and refurbished by suitable tradespeople.

Astute investors know that no matter what condition the market is in, the buy to let industry will always remain one of the best investments they put their money in. These people are fully aware that the property market will always pick up and that people will always need a place to live.