Information on buy-to-let properties | Understanding profit risks when using buy-to-let properties
If you have property to let, you will be aware of what a good investment bricks and mortar can be. Being in a financially good place to purchase a buy-to-let property can have many advantages, especially if you are in a position to command a rental price that will more than cover the mortgage. However, understanding profit and possible risks is crucial so that you can do your best to avoid pitfalls.
Firstly, utilising a proficient estate agent, such as Charlton Grace in Basingstoke, is crucial if you are to find properties that are a good investment. From a rental property you should strive to make a 12% to 15% annual yield, meaning that your rental income should cover all of the expenses needed for the home and leave this profit percentage as the remainder. Whilst this may seem low, you should remember that income is going to pay the mortgage on the home, in addition to covering repair or replacement costs and management fees if you have them.
Before making any property investment, it will be crucial to investigate any risks. This includes considering what would happen if house prices plummet and rental incomes fall. You should also weigh up the possibility of having lengthy periods of vacancy between tenants, and factor the potential loss of income into your calculations.
Knowing all the risks involved in a buy-to-let purchase will allow you to have as much success as a landlord as possible. By investing wisely, you can ensure that your profit is as big as possible.
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