Why invest in residential property
Currently, there is no better time to buy a residential property with the SDLT temporary holiday – 2nd home buyers/ buy to let investors still have the 3% surcharge, but on the higher £500k threshold. So still saving to be made.
And talking of“savings” this time meaning physical savings, there are some weighty rumours and some very interesting communication coming from the Bank of England regarding a plausible negative interest rate for the UK. What will this mean for some? Invest? Spend? Or pay to keep your savings in the bank – may be some tricky choices ahead for the hard and fast savers, this was to happen.
Regardless of the crazy times we are living in right now, and what mayencourage new investment, property is, and always has been;a tangible asset, resilient, and typically low volatility – even in times of economic downturn.
Be an investor, not a landlord
There are many buys to let options that provide a hands-off, passive income. Your property is fully managed, by a specialist management & letting company.
Many projects are ring-fenced to lessen the risk, especially in the off-plan, build phase.
Some projects, when off-plan, offer a full deposit protection product up to 30%.
High rental returns – 3%/4% – 6% projected net rental yield per year on long-term lets and an estimated minimum of 10% net p.a. on Serviced Accommodation short-term lets – however this is a more restricted market and the developer has to be granted permission to operate short-term lets within the building – always check this has been obtained.
Where to invest in residential property
When deciding where to invest in residential buy to let there are a few things to be mindful of to ensure the best returns.
Capital growth on the outskirts of certain major cities can benefit you for huge returns.
Look for regeneration areas and high-speed rail links, such as the HS2, which will benefit many cities over the next decade.
Projects where you can have the best of both rental-income worlds; long-term lets (AST) and Short-term lets. This gives you a return of say 5% to +10% depending on what you choose.
Buying with the aid of a mortgage and leveraging should and can, in most cases, be a consideration, especially if you are looking to grow or start building a property portfolio. The beauty of say, £100,000 means you could leverage your capital and buy two properties with a £50,000 deposit and apply for two mortgages (maybe not at the same time, but once you have one, a second can sometimes be easier) for the remaining balance – up to 75%-80% LTV on a buy to let mortgage.
How to invest in Residential property
If you are not looking to be a landlord, and want a more hands-off, passive income to ensure you are getting the best returns from Residential buy to let talk to an investment specialist about your options, following your specific criteria. They will supply all the information you require, including comprehensive due diligence, on the best option for you.