Loughborough landlords
Discussing Buy to Let
There have
been a number of news stories recently reporting on the rise in house prices,
growing confidence in the economy and the modest drops in the rate of
unemployment. In a recent conversation with a landlord who is considering investing in
property in Loughborough for the first time we discussed some of the indicators
- so what are they?
Interest
rates are still very low and only last week the new Governor of the Bank of
England, Mark Carney, stated the Banks intention to keep interest rates low for
the present in his determination not to hinder the recovery. Additionally
sources of lending for what is traditionally called ‘Buy to Let’ mortgages are
more readily available again. If you have money in the bank that you would like
to see make a better return then a good option could be investing in a
property. With a 25% deposit and money to cover legal costs you could be
earning over 6% on your capital employed, well above what many of us can earn
in the bank.
An investment
property must be handled carefully though and a rise in interest rates at some
time should be allowed for. Selecting the right type of property is vital; get good local advice. House or flat, furnished or
unfurnished, modern or older, in town or in a village, parking off road or not,
high yield on low purchase price/resale price or the other way around? Other
factors to consider are structuring the financing and ownership of the property
correctly taking into account long term plans and your eventual exit strategy
and making the most of the generous tax allowances landlords enjoy. Ask
yourself how many years will you be in it? Is it a nest egg for you or your
children?
In this area we're quite fortunate. Loughborough
and its satellite villages are a thriving area with unrivalled road, rail and
air transport links via East Midlands Airport, a new inner relief road, a
vibrant University (one of the leading Universities in the country), well
established technology companies and now the possibilities of a new technology
park or other investment in the old AstraZeneca site on the horizon.
All the indications are that prices are moving this year and every forecast is for a larger and larger rented sector - all good if you get it right and the amount of information available now means you should get it right.
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