If you’ve ever wondered about the right time to become a private landlord, could 2011 be it?
With house prices at a standstill and tenant demand for good quality property lettings on the rise, some who have been hovering on the fence think that 2011 could be the time to take a firm leap onto the landlord side.
There are many would-be first-time time buyers struggling to buy a house but who battle with financing it all. This leaves room for potential landlords with spare cash to dive in and take the opportunity.
However, as with any such opportunities, there are risks of course. Remember that now, capital gains on residential lettings are not looked for so much as the monthly house rent as the source of income.
When investing, local knowledge is key so talk to letting agencies to get a clear understanding of the area and what type of property rentals are in demand.
According to the National Landlord’s Association, 2010 saw the average rental income averaging around 4 to 5% although this largely depends on the property type and location.
This would amount to around £4,000 to £5,000 on a £100,000 rental property. Remember however that you need to take expenses off this and then tax – you’re taxed on your profits after expenses.
A sizeable deposit is needed but it looks like things are looking up for BTL financing this year with more competitive products to choose from. So good news on that front.
What ever you decide, make sure you do your research first. Our Buy-to-let Anthology is a very handy read if you’re thinking of taking the plunge to rent property.