Buy to Let Properties – the Pros and Cons of Investment

It’s well known in the world of investment, that property is without doubt amongst the safest you can make. Whereas stocks and shares can rise and plummet, the business of property is one of the few that can remain relatively stable. Although the market is liable to peaks and troughs as any is, owning and renting a property out is without doubt one of the sure ways of making money back on your investment, whilst also simultaneously having a second disposable income coming in every month.

Owning and maintaining a buy to let property is a big job, however, don’t be fooled! It’s not simply sitting back and receiving payments every month, and as with all responsibilities it comes with its pros and cons.

Today, we’re going to be taking a look at what the pros and cons of investing in buy to let properties actually are.


It’s a Long Term Investment

First things first, it’s an investment that’ll last. And on a money maker, isn’t that what you want?

House prices can fluctuate, sure, however it doesn’t change the fact that they’re always worth something. Over the long term, however, prices are likely to increase, and therefore there’s always an opportunity for growth as well.

It’s overall likely that the profit you’ll make on investing in property is going to be a healthy one. after all, don’t we all want to invest in something that gives it back?

You Can Generate a Second Income

If you’re already working, then you can easily generate a second income by investing in a buy to let property.

They say that money can’t buy you happiness, but one thing is for certain, it gives you options and can make your life a whole lot easier. If you have the money to invest, why stop at one income when you can have a second?

The great thing about this sort of income, is it’s regular. It’s not a one off payment that you can go and blow – it’s routine and will make a big difference to your monthly cashflow.

For many people, this secondary income can even become the very thing that gives them the freedom to leave their current job, and work for themselves.

Many of us dream of being our own boss, and by investing in a buy to let property, you could very well do this. It’s all achievable.

You Can Benefit from Tax Repayments

Effectively, owning and renting out a property is having a business of sorts – which means you’ll have to register with HMRC and fill out a self-assessment tax return on a yearly basis.

The good news is, for the tax you pay – you can also receive repayments on expenses! These include:

  • Advertising fees
  • Repair fees
  • Council tax fees
  • Council bills
  • Any interest on your buy to let payments
  • Any fees you’ve paid to letting agents

And there’s likely to be more too. for the tax you have to pay, you get some relief – which is a huge plus to investing in buy to let. It’s a well-respected, business-like investment.


What if You Can’t Fill the Property?

Buy to let properties can be extremely financially fruitful, and if you make a success of them, they’re a great investment. But in order to do this, you’ll have to work hard to get one thing – tenants.

Without tenants, all you’ve got is another property to pay for. Of course, it’s expected at first, but if you’re struggling to fill the property for some time remember you are still responsible for it financially, but without that second income.

If you invest in the right places and properties and do your job well, this shouldn’t be an issue. Take it seriously and treat it like the business venture it could well be.

You are Responsible for Maintenance

If something goes wrong or needs repaired, you are solely responsible for the maintenance.

If you’re not handy at DIY repairs yourself, then chances are you’re going to have to fork out the cash to have a repair company come out and do it for you. The good news is, in some cases you’ll be able to claim this back in tax expenses.

The Stamp Duty Land Tax Increase

Finally, the stamp duty land tax (SDLT) has increased in recent years, meaning that buy to let landlords now have to pay a 3% increase when purchasing the property.

Generally speaking, this makes it more expensive initially when buying the property, and isn’t money you can claim back.

A potentially rewarding investment, buy to let can be extremely profitable when it’s done properly.

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