It's been all over the media that the UK property market is in decline and that prices will drop another 10% over the next 12 months. It's a lesson to us all that things can go down as well as up. But if you take a long-term look, property has always significantly outperformed the stock market when it comes to making money.
The idea with BTL is that you buy a house or flat as cheaply as possible. You then get tenants in who pay you rent which you then used to pay for the mortgage on the property leaving a reasonable sum of money left over for yourself. A few years later when your tenants have finished paying off your mortgage you can opted to either keep the property and receive a nice monthly income or sell the property for a large profit. At least that's what you hope for.
Because it's been touted as 'easy money' a lot of people have rushed in over the years and some of them are now realising that the dream can become a bit of a nightmare. With increasing mortgage rates and low rents many BTL investors are finding that the tenant's rent no longer covers the building insurance, the upkeep of the property and, most importantly of all, the mortgage payments. Ironically a lot of these properties are ending up back on property auctions from where they once came.
None of this sounds like a good reason to invest in the current BTL market but if you can keep a level head and are financially secure then it could still be worth your while. Making money always involves an element of gambling and if you're prepared to speculate there's definitely big money still to be made in the long term.
So why might now be a good time to invest? Well property prices are falling and most of the profit successful property investors make is when they buy. Most novice investors buy their properties at too high a price. This not only cuts their ultimate profit it also leaves them vulnerable to changes in mortgage rates.
Property auctions are now seeing a steep rise in the number of BTL and repossession properties. The more properties competing to be sold, the lower the selling prices you will see. You may think that no one wants to buy at the moment but just go to an auction. The numbers of people attending to buy will be down but those left will be the seasoned investor looking to reap the rewards of investing in a depressed market.
The market may be at a low ebb at the moment but seasoned investors are certain that at some point in the future it will start to rise. The UK has limited housing stock and people will always need somewhere to live. Add to that the British obsession of owning your own home and you have a housing market that ultimately always rises. Buying now means taking advantage of the bargain property prices.
Remember most of the people doing this at the moment are seasoned investors who have both experience and financial funds to fall back on if the dip turns into a slump. If you're financially secure and you're willing to speculate then this is the time to go to a property auction and snap up a bargain or two.
The idea with BTL is that you buy a house or flat as cheaply as possible. You then get tenants in who pay you rent which you then used to pay for the mortgage on the property leaving a reasonable sum of money left over for yourself. A few years later when your tenants have finished paying off your mortgage you can opted to either keep the property and receive a nice monthly income or sell the property for a large profit. At least that's what you hope for.
Because it's been touted as 'easy money' a lot of people have rushed in over the years and some of them are now realising that the dream can become a bit of a nightmare. With increasing mortgage rates and low rents many BTL investors are finding that the tenant's rent no longer covers the building insurance, the upkeep of the property and, most importantly of all, the mortgage payments. Ironically a lot of these properties are ending up back on property auctions from where they once came.
None of this sounds like a good reason to invest in the current BTL market but if you can keep a level head and are financially secure then it could still be worth your while. Making money always involves an element of gambling and if you're prepared to speculate there's definitely big money still to be made in the long term.
So why might now be a good time to invest? Well property prices are falling and most of the profit successful property investors make is when they buy. Most novice investors buy their properties at too high a price. This not only cuts their ultimate profit it also leaves them vulnerable to changes in mortgage rates.
Property auctions are now seeing a steep rise in the number of BTL and repossession properties. The more properties competing to be sold, the lower the selling prices you will see. You may think that no one wants to buy at the moment but just go to an auction. The numbers of people attending to buy will be down but those left will be the seasoned investor looking to reap the rewards of investing in a depressed market.
The market may be at a low ebb at the moment but seasoned investors are certain that at some point in the future it will start to rise. The UK has limited housing stock and people will always need somewhere to live. Add to that the British obsession of owning your own home and you have a housing market that ultimately always rises. Buying now means taking advantage of the bargain property prices.
Remember most of the people doing this at the moment are seasoned investors who have both experience and financial funds to fall back on if the dip turns into a slump. If you're financially secure and you're willing to speculate then this is the time to go to a property auction and snap up a bargain or two.
About the Author:
If you are interested in the UK property market please visit my property auction site which lists property auction houses throughout the UK including links to North West property auctions.
1 comment:
hey,
I think you are right about the profit a property investment can make for you. But there is something I want to point out. The investments need to be more diverse. Investors should look up on other sectors such as film industry for investment.I think people should attain a broader perspective for investment.Check out this url http://tinyurl.com/65uvo2
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