A to Z of Property Investing: B is for Buy-to-Let

In the property investing world, buy-to-let is a buzzword and concept that you can’t fail to miss. In fact, it’s the crux of the business for the majority of property investors.

The idea of buy-to-let is pretty self-explanatory – you buy a property at a good price and let it out to tenants, giving you a regular income on the property. Not only that, but the hope is that when you come to sell, the property will have risen in value, giving you a tidy profit. It might sound easy – and this has surely tempted many people to have a go at buying-to-let – but it’s not always as simple as that.

For example, there’s the small matter of finding the right property to buy and getting it at an affordable price. Any old property won’t do – you have to select the right type of property, in the right area and market it towards the right type of people in order to stand a chance of being successful. If you get any of these factors wrong, you may find yourself stuck with a property that you can’t rent out, which will be costing you money. This is the point at which many hopeful, or amateur landlords, get disheartened and give up on the idea.

Serious investors, however, are usually more aware of the importance of market factors and, in theory, should have done more research before purchasing a buy-to-let property. They’re not immune from the odd buy-to-let purchase mistake, but are usually more prepared to learn from their mistakes and move on to the next investment.

As well as describing a type of property purchase, the term buy-to-let is often used for a type of mortgage option. In the height of the property surge, buy-to-let mortgages were very widely available, with many great deals available to tempt people. Although still an option, the choices have somewhat narrowed, but this has helped weed out the ‘having a go’ investors, and given more room to the serious buy-to-let property investors.

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