Experts are warning that although the current boom in the investor property market is pushing rents up to an all time high, the buy to let market may soon burst and annual returns for buy to let investment properties could fall quite dramatically.
All landlords know how good things are at the moment: first time buyers are really struggling to scrape together enough money for a deposit and those of us with cash to spare are cashing in on their misfortune by snapping up the properties at the cheaper end of the market. Even the banks are jumping on the buy to let bandwagon by relaxing their lending criteria for wannabe landlords, and if you take a quick look around, you will soon see that there is a lot of excellent buy to let mortgage products on offer at the moment.
However, always remember that the buy to let market is a long-term investment and it is sensible not to stretch your finances too far when buying a buy to let property. In time, the buy to let bubble will burst and rents will fall, and if interest rates rise you may see your profit margins significantly eroded.
Buy to let investment is not for everyone. It works for me and I enjoy a good income from my properties, but the key to success in the buy to let investment market is to do your homework and take into account the various costs involved, especially if you decide to use an agent to manage your properties.
