Buy to let mortgages seemed to be quite on a wave back in the nineties, and now, the trend is back, apparently. And luckily for all families searching for a viable business idea, this is indeed a great one! Buy to lend properties are great investments, the philosophy behind them is driven by buying a property for commercial purposes, and then paying the mortgage with the money resulted from rent. And, making a profit. This is a great opportunity to grow as a business owner without an enormous financial effort. But let’s see why you should choose this alternative as our go-to investment idea, and what are some useful tips for buy to let landlords.
A regular source of income…
If you manage to find a great rental property and a good mortgage deal, such investments are able to bring you a steady and generous monthly income. However, always make sure you understand your numbers properly. Otherwise, your income might be smaller than the mortgage, which is not necessarily a good thing. You aim to make a profit, not lose money!
…if you find the right buy to let mortgage
A vital aspect of these investments is finding the right mortgage. This way, you will make sure you find the perfect balance between your income and expenses and make a profit at the end of the day. Sure, buy to lend mortgages are a little bit more expensive than residential loans, because mortgages for buy to let properties agencies expect the holder of the title to make some profit out of their investment. Also, the risk the lender puts themselves to is higher in the case of these loans. On the other hand, some providers do have some competitive rates. Thus, we find it necessary for all those who consider such investments to research the market well before making a decision. Some lenders have the initial deposits set higher than others do, which is worth to take note of as well.
…and the income will be quite generous
Looking closely at the potential income generated by these investments is not always as easy as one might think. However, out there are certain calculators that will help you predict approximately the generated profit. Also, you could discuss with real estate agents and see what the prices for renting similar properties as yours have on the local market. Once again, pick your rental rates well and you will be making quite a profit! Advisable would be to make sure you can make a 125% profit out of your mortgage interest payments for proper results.
These are the reasons why these investments for family-run businesses. Make sure you pick your lender well and obtain some managing know-how and qualifications. They will help you greatly in the process of assuring a steady monthly income and making sure you have happy tenants.