Recently, Buy to Let has become a much more expensive and risky investment, but there are ways to make it work – you just need to do your research

In order to understand whether a Buy to Let (BTL) is the right option for you, you need to get a grip on where the market stands today. Consider factors such as the current economic climate, the local rental market, and how much you will need to invest in order to make a BTL profitable.

BTL properties should be evaluated based on their location, size, condition, and potential rental income. Consider comparing similar properties in the area, and be aware of any local rental laws. When you are ready to make a move, consult with a reputable realtor (see Vancouver, WA realtor Chrystal Wright for reference) who can assist you in finding the right property at the right price, as well as give you advice on finance options, tax implications, and other important issues.

Now, let’s explore the recent changes in BTL and assess how good an investment it really is in today’s climate.

One of the aspects that have really changed BTL is stamp duty. Landlords are now required to pay an additional 3% stamp duty compared to that which is taken from homeowners. What’s more, if a landlord bought a main residence for 100,000 then they would pay no stamp duty (as this is below the 125,000 limits), but as a second home, they would pay 3,000.

What’s more, landlords may have to make changes to the property as a result of legal and survey fees. They may need to upgrade health and safety measures such as boilers if the property doesn’t meet today’s gas safety standards. Likewise, if the roof gutter does not meet safety standards, it should be replaced. Ideally, for every 10 feet of gutter length, the gutter should slope 1/4 inch toward the downspout. For the water to completely drain from the system, it also needs to be sloped properly.

A gutter that is perfectly flat throughout its entire length might not be able to let water exit the system. In such an instance, the landlord would have to get the existing gutter replaced with the help of a professional who knows the safety standards for installing seamless gutters tampa or elsewhere. Likewise, if the roof of the property has holes and cracks, then the owner would be required to get it repaired. The safety standard for a roof is: it should be able to support loads; it should provide resistance to heat loss; it should be ventilated to protect it from condensation. If these are not met, the landlord would have to do the needful to make the roof adhere to the rules.

If you’re buying a property with cash, a property, and your rent will need to grow each year by around 3% to keep up with inflation and retain value. This value then needs to increase even further to cover the cost of selling when it comes to it, as there are legal and agent fees to consider, as well as capital gains tax (CGT) incurred on any growth in capital value.

For financial investment, CGT is charged 10% for lower-rate taxpayers and 18% for higher-rate payers. Reading these figures, there’s no denying the fact that BTL has become a more complex investment opportunity than in previous years, which is why it is always best to use people like Conveyancing Solicitors Manchester, and other places to organize whether it is the right investment and sort out all the paperwork. Other investments can cost very little to invest in and can even attract additional tax relief. However, this isn’t to say that BTL cannot work for landlords. In fact, for some, it may still be the best option.

A rise in prices can lead to profits in the long term. Unlike stocks and shares property can be bought with a deposit. A cash investment of 100,000 can be much more lucrative than the same amount being simply invested. You can benefit from a growth in assets worth 300,000. This means even just a 10% price rise can deliver an exceptional return.

You can also take opportunities to buy properties at a true discount by purchasing from sellers who need a quick turnaround and are therefore willing to sell for potentially tens of thousands of pounds less. This is becoming more common as more and more landlords try to exit BTL by selling up quickly.

Similarly, if a property cannot be bought through a generic mortgage scheme but is available through cash only, it may be possible to purchase the property discounted, fix any issues, and make an immediate profit.

Because some landlords are leaving the BTL market, there could be a reduction in the number of properties available to rent, which will help keep yields positive, whilst a steady trickle of BTL properties returning to the market could create the opportunity to snag a bargain.

Whether you are considering an investment or are already a landlord, speaking to professionals in the Buy to Let industry can help you understand the ever-changing market more clearly. Visit glenhawk.com to find out more about what we can do for you.