Buying to Let Part 1

By in Blog with 0 Comments

As pension funds shrink, many people consider the buy-to-let opportunity as a viable alternative, and with good reason. The effect of low interest rates and a historically rising property market make buy-to-let one of the most attractive investments accessible to the public. And the great thing is – you can use the bank’s money! The average national annual return is over 5%* excluding capital growth – which has always risen strongly over the longer term. (NB: such an investment was never designed to be a short term “fix”!)

The principle is this: The compounding aspect of the value of the property coupled with increasing rental returns far outstrip any inflation in running costs in the medium to long term. Your annually rising rental income should more than cover your mortgage payments in the long term, because repayments do not compound in the same way, although fluctuations in the rate of interest over the term should be expected.

In principle your surplus rental income should eventually pay off your mortgage, providing you with a regular “retirement” income whilst keeping your equity intact, and hopefully rising. Bear in mind that if you do choose to pay off your mortgage early, the whole of the rental income may be taxable. Some people purchase another property when they reach the point of surplus and build a valuable property portfolio.

SDLT (Stamp Duty) is usually 3% for a BTL property and Capital Gains Tax may also be payable on any sale, so we would always suggest you seek the advice of an accountant before purchasing a buy-to-let property. But don’t le the tax tail wag the investment dog!

Please feel free to call us for a chat if you would like to investigate buy-to-let opportunities in this area.

 

Share This
George Tatham-Losh

Since forming the business in 2009, our founder, George Tatham-Losh, has become highly regarded as the local go to expert for advice on maximising property values and getting the most out of property investments, regularly speaking at events and holding well attended seminars. Born and raised in Cheltenham, George knows the town and County like no other and knows what works in the area. Alongside George is a specialist team of agents with a wealth of experience to help you sell, buy, let or rent property in Gloucestershire.

Blog Post Disclaimer

This is a personal blog. Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organizations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated. Any views or opinions are not intended to malign any religion, ethnic group, club, organization, company, or individual.

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information.

Downloadable Files and Images Any downloadable file, including but not limited to pdfs, docs, jpegs, pngs, is provided at the user’s own risk. The owner will not be liable for any losses, injuries, or damages resulting from a corrupted or damaged file.

Comments Comments are welcome. However, the blog owner reserves the right to edit or delete any comments submitted to this blog without notice due to :

  • Comments deemed to be spam or questionable spam.
  • Comments including profanity.
  • Comments containing language or concepts that could be deemed offensive.
  • Comments containing hate speech, credible threats, or direct attacks on an individual or group.

The blog owner is not responsible for the content in comments.

This blog disclaimer is subject to change at anytime.

If in considering action upon the contents of this blog, one should always seek professional advice.

We Won Banner We Won Banner