A recent survey suggested that half of current buy to let landlords and residential property investors would no longer come into the sector if they were considering it now. What this fails to recognise, however, is that most of the things that have made buy to let less attractive can easily be overcome.
A limited company is often the best option for buy to let
For a start, measures such as mortgage interest tax relief can easily be overcome by investing in buy to let property via a limited company. Yes, the interests rates on your mortgage may be a little higher, but this will be more than made up for by the savings made on tax and the fact that you can reinvest profit into further properties without the need to pay tax on it.
In truth, the only thing that using a limited company for your buy to let investments cannot help with is Stamp Duty. The 3% levy on properties over £40,000 cannot be avoided sadly, but if you're looking for a long-term residential property investment it shouldn't really be enough to put you off.
Portfolio landlords are dominating the sector
As I've said before in the blog, the current buy to let investment landscape may be very different from five years ago, but it's relatively easy to work the changes into your calculations. While there may be less small-time residential investors with one or two properties, we are seeing more professional and portfolio landlords taking up the slack, mostly via the limited company model.
The simplest way to make money from buy to let is to buy a distressed property and do it up in order to create equity, then remortgage it and take out the cash to spend on your next project. It's a simple approach that really works, provided that you take the time to find the right investment property with good rental potential.
Know what you want to achieve from buy to let
If you want to make money from buy to let investment, do your research and get a good team of people around you. From your mortgage adviser to your account and tradespeople, they can all have an influence on how successful you are and how much money you can make. Most importantly, go into it with your eyes open and with your ultimate goal in mind.