Benefits of a Buy-to-Let for Families

The past year has shown just how much our working lives have changed. So many of us are now working from home, and with more time on our hands, you might be thinking about how to make this work long-term for you, perhaps with a business idea or finally starting a side-hustle that you have been wanting to do for a long time.

Investing in a property, to run it as a buy to let property, is something that can be really profitable, and a good way to use money. You might have had some inheritance come in, or have just saved up a lot of money this past year, with no holidays, commuting costs, or going out. Like many business ideas and investments, it isn’t all rosy and there are some downsides. For instance, there are some ‘hidden’ costs when it comes to buying and selling homes. Stamp duty is something that you’d need to factor in too; how much will you have to pay? What is the best way of calculating what you owe? All of this is to be considered.

So with that in mind, here are the pros and cons of buying a property to rent out.

Long term investment

House prices can fluctuate, especially depending on where you live or alerting to buy a property to let. However, property is still an investment that is pretty safe in the long-term. People are always going to want somewhere to live, it then just becomes about selling at the right time to make your money back, and more. Property prices can go up and they can go down, but over time, this can increase. So as an investment, you are likely to make a healthy profit.

Generate an income as well as meet mortgage payments

One of the main benefits of a buy-to-let property investment is that it is done with the aim of getting tenants in, so that they will be the ones paying the mortgage repayments for you, essentially. The hug benefit from this is that you then get your mortgage paid, and will be on the way to owning it outright, without having to have spent too much of your own money. Plus, if your mortgage is quite cheap, but the rent is higher, then you can pocket the rest as an income. When it comes to this, though, it is important to make sure that you compare landlord insurance so that you are maximising the amount of money that you can get each month, as well as getting the coverage that you need for being a landlord.

One other point to note is that if you take advantage of a buy to let mortgages, that often has some low rates, then you could increase the amount of money that you take home each month.

Offset costs against tax bill

As the property, and the money made from it, will come from being self-employed, you will have to complete a tax return at the end of each month. For anything like repairs, fees to letting agents, bills and council tax (if you are the one who pays for them), as well as costs of advertising and so on, can all be claimed back. So for someone looking to invest, it can be a tax-efficient way of doing so.

The benefit that it can bring to families is that you will then have a second home. If children need it later in life, or perhaps when going away to be a University student, you automatically have somewhere for them to live. it can be a huge investment, but when done wisely, it can be completely worth it.

*this is a collaborative post

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