The Benefits of Buy-to-let
The Benefits of Buy-to-let
Owning a buy-to-let property in Dorset can be rewarding, not only as an income stream, but for capital growth too. If you are considering acquiring or renting out a property, there are many things you need to consider, from the rental income to statutory obligations, and of course ensuring you have the right tenant in-situ.
Dorset Property has been offering a high quality lettings and property management service since 1984. During this time we have developed an in-depth understanding of the regulations, the business and the local market.
We offer a fully comprehensive landlord service which includes marketing the property, finding a suitable tenant, conducting comprehensive tenant referencing, setting up the tenancy, collecting the rent, chasing any arrears and managing the tenancy and the property.
Unless you can fund your property purchase with cash, you will require a buy-to-let mortgage. For landlords, this is the most popular way of purchasing property, and ensures you won’t need to have all your cash tied up in one property, which may enable you to acquire more than one. Interest only mortgages can enable you to benefit from a higher income due to lower mortgage repayments, and with any buy-to-let mortgage you can offset a portion of your interest payments against your tax bill at the year end.
As a rule of thumb, you will require a minimum of 25% deposit, but the more you put down, the better rate you can expect to receive. While interest rates remain low, there are plenty of lenders to choose from, and the best way to find the right product for you is to speak with a reputable mortgage advisor. As your local estate agent in Dorset we are happy to help and put you in touch with a recommended mortgage adviser who will assist you with your lending criteria and affordability.
Potential for High Returns
If you find a sound investment with a great yield, you will receive a fantastic monthly income stream. Furthermore, upon taking a long-term view on your investment, you should see the value of your property increase over time. Within Dorset, your void periods in-between tenancies will be short, owing to the strong demand for rental properties in the area, along with a shortage of rental properties available. In order to source that ‘sound investment’ it’s important to do your homework and to ensure the figures stack up as they should. If in doubt, talk to us and we can help you find that perfect property.
Diversify the Risks
Within the uncertain economic climate in which we find ourselves owing to the global pandemic, the one certainty which has remained is the demand for property, both on the sales and the rentals side. The property market has outperformed the economy, particularly within the past 12-24 months.
If you currently hold capital within projects or investments, and you are worried what the future might hold, you can be certain that property in Dorset is seen as a sound investment with good returns and strong capital growth. Despite this, it is essential to do the maths and consider any interest and repayments, to ensure the rental income covers not only the fixed costs, but also maintenance and other expenses associated with a rental property. In this regard we strongly recommend seeking the advice of a trusted lettings and property expert so you can be presented with the best opportunities for you.
Helping friends and family
We’ve seen a trend recently of people investing in buy-to-let properties as a way of helping friends and family, while at the same time building their property portfolio and generating cashflow. It may be to help an elderly relative to downsize, or a young person to gain housing at university or for work, but you must remember that the rules and regulations for landlords to abide by are applicable in just the same way. To find out your obligations as a landlord, we are more than happy to offer you a full ‘Landlord Health Check’, to ensure that you are not in breach of any of your responsibilities to your tenant.
The above are just a few of the advantages of owning a buy-to-let investment property. There are many things to consider, so whether you are considering acquiring your first, or would like advice on running your portfolio, do give us a call and we’ll be happy to help. Dorset Property are your local property experts for the Dorset area with six strategically placed offices throughout the county. Contact us to chat with a member of our friendly and experienced team.
Added: 26th September 2021