Is buy to let in Grantham a good investment? That’s a really good question, for so many different reasons. Here are Jason Lee MD of Secure My Sales Estate Agents Grantham thoughts.
Firstly, what makes a ‘good investment’?
What are the hallmarks of a ‘good investment’?
Secondly, is buy to let a ‘good investment for you’, personally speaking?
Just like the word ‘good’ is a concept for discussion, so is whether a good investment works for you. Thinking about it further, what does investment actually mean?
These are exactly the type of questions you should be asking yourself if you are thinking of becoming a buy to let investor in Grantham. They will help you shape your future if you do become a landlord of residential properties.
Here, we will look at what makes a good investment when it comes to property.
What does a good investment look like?
First ask yourself: What do you want a good investment to look like?
It might be that you have a little money in the bank, or you want to use some of your savings as a deposit for a buy-to-let mortgage. The rewards from a property investment will certainly outweigh leaving the money in a standard bank account. That’s great on the face of it, but what are you investing for? Do you want to get a return in terms of a good rental income, or are you thinking long term when the property you buy could be worth a lot more money giving you the option to sell and profit later on?
So, think about your reasons for investing and what you want to get out of it.
What does good actually mean?
What does ‘good’ mean when it comes to looking at a ‘good investment’ in property?
It might be that you’re looking at capital growth (your property rising in value) or it might be that ‘good’ means a good rental yield. This means that you get a solid return on your money through the rent you get back.
To calculate the yield, divide the annual rental amount by the property value and then times that by 100. This will give you the rental yield. A good yield varies depending on where the property is located, but you should be looking at around six percent or above. To decide whether your investment is good, make sure everything adds up. Your rental income must at least cover your costs.
Is the property right for a good investment?
To answer this question, you’ll need to consider whether the property is in the right area for it to do well when it comes to finding a good tenant.
- Is it likely to soak up some of your funds because it needs a lot of repairs and maintenance to bring it up to scratch?
- You may understand that it needs work, and you may have budgeted for it, but if you exceed your budget, will this still make it a good investment?
Try and keep your emotions out of it. Buying and renting property should be based on business decisions. Plan, and then plan some more.
Is it just a money investment?
There is more to buy to let than just investing money. Finances are imperative but it’s not the only factor you should be thinking about.
- Can you afford the time to be a landlord?
- Can you invest thinking space and dedicate hours to make sure you are on the right side of the law?
- Do you have the time to invest in doing any maintenance or repairs?
Being a buy to rent landlord is so much more than merely buying a property and waiting for the rent to arrive in your bank account.
Assess your priorities, as not having the time doesn’t mean you can’t invest in property. It might mean that you ask a lettings agent to find you a tenant and then manage the property on your behalf.
Buying and renting out a house could be a fantastic opportunity for you, but you must do your homework. While you will of course be looking online and asking friends or relatives, it’s important you speak with the property experts. In Grantham that’s us and we would love to help you as you start your journey. Give us a call on 01476825258 or email us at support@securemysale.co.uk. For all of your property needs and advice we are here for you. As a local family business with all team members living in the town we have all the knowledge to help you. For a chat about property or the market one of our friendly team at Secure My Sale Estate Agents Grantham would be happy to assist at your home, or our office in Westgate.
www.securemysale.co.uk
