In a bid to buoy up a very stagnant housing market, many of the big high street lenders are currently offering some excellent mortgage deals. Sadly a glut of cut price mortgage deals are unlikely to be helpful to all those first time buyers unable to save up for a hefty deposit, but it is great news for savvy buyers looking to invest in the buy to let market. But although it is a great time to consider investing in rental property or increasing an existing portfolio, landlords should be careful not to rush out and invest in a property without considering the potential problems involved.
A buy to let property should always be thought of as a long-term investment. House prices go up and down (mostly down at the moment), so if you hope to make a quick profit by buying a property, letting it out for a year and then selling it on, you are likely to be sadly disappointed. You are far more likely to see a decent return on your initial investment if you are able to hold on to the property for at least five years.
Demand for buy to let properties may be high, but rent arrears are also significantly higher than in previous years thanks to challenging economic conditions in the UK. Therefore even though a buy to let property can bring in a reasonable income, it is important to realise that if you pick the wrong area to invest in or the capital value of your property falls by a large margin, the value of your investment could soon turn into a loss.
