Should I buy to let in 2015?

JoeBlack78

I've been going back and forth on getting involved with buy to let for a few years, and am starting to think about it a bit more recently.

The short version of my situation is that I am mortgage free and have a lump in the bank (roughly half the size of the equity in my house).

Let's assume I am doing all of the sensible, obvious things (maxing my ISA's, contributing to a pension, have an emergency pot, and have some money in trackers and equities. Also, assume I would be sensible and careful about entering buy to let (I understand it involves risk and is not straight forward).

Is it the right time to get involved in buy to let in general?

What do you consider the general risk and potential of the renting market to be?

My rough plan would probably be to release 50K from my current mortgage free property to get one buy to let. And then get a second buy to let with 50K from my lump.

One can pay my new mortgage (even if it breaks even, I benefit from rising property prices on the buy to let) and the other can be income + rising property prices.

Thanks in advance.

cloo

It kind of depends where you are. In a city where jobs are plentiful, I expect BTL to be a pretty sound investment at any time, especially if you hold onto the property for 5 years or more.

The market is expected to go up modestly around the UK and hold in London (as it's kind of peaked) according to various parties, including the RICS, so I certainly wouldn't say it's a bad time to invest.

eddddy

Hi JoeBlack

You talk about BTL alongside ISAs and pensions as though it is primarily an investment.

It's not really, it's primarily a business (that requires a big chunk of investment capital).

People who do not understand the BTL business well enough (or are just unlucky) can lose huge sums of money. Reasons might include:

Failing to do an accurate business plan
Buying the 'wrong' property
Using a 'bad' agent
Letting 'bad' tenants into your property
Not knowing/understanding relevant legislation

Many 'unsophisticated' LLs are lucky. They happen to choose a good agent (perhaps by chance), who delivers a good tenant, and everything goes marvelously.

Others are not so lucky.

Lord_Baltimore

As has been said, being a Landlord comes with responsibility. It's a responsibility you are best placed to meet when you are armed with the facts.

Check this link out.

Good luck.

Pixie5740

How long is a piece of string? Where are you going to be buying this BTL? What kind of property will £50k get you in that area? Who is your target market? How to the figures stack up against alternative investments?