Purchasing a buy-to-let investment property has become increasingly popular in recent years, with growing numbers of both first time investors and those already with a substantial property portfolio.
Buy to let properties have gained appeal due to the increase in interest for real estate investments, with the possibility of enabling the property to pay for itself. In much the same way as rental properties provide an income to the owners in local areas, the overseas market has gained appeal due to the lower purchasing costs and a number of other interests to suit the individuals.
Depending upon the location, the owner potentially has a full 12 month season to rent to holiday makers, often originating from the same home country as the owners. Some people purchase with the intention of moving to warmer climates for retirement, allowing the rental during the preceding years to cover the costs of the mortgage. This way the property is owned outright when the time comes to move.
Others purchase a buy-to-let investment property in a location where they often enjoy visiting for holidays, saving the trouble of searching for over-booked hotel accommodation. Owners can also generate an income renting out the property during the times when it is not in use. The same set up is often used by people who travel regularly to a particular location for business, finding their own property more agreeable to staying in hotels. This is especially beneficial when they can earn an income from it when it is not in use.
Even when the owner is not planning to use the property as a home during retirement, the constant increases in property prices allows for potentially substantial capital growth at the moment of re-selling.
When thinking about a buy-to-let property purchase, along with choosing the area, considerations such as the mortgage, associated buying costs, taxes and maintenance are especially important. The length of the rental season will have a great effect on the potential income, as in a tropical climate the season is normally 12 months of the year, while if buying in a ski resort, the rental season will be more restricted. City centre properties can be ideal for buyers who do not wish to constantly be searching for tenants, as many inner city properties attract long term rental clients.
Where ever the property is purchased, if planning to buy-to-let, it is highly important to have confidence in the selected management company. Receiving professional advice at the buying stage is crucial to fully understand the processes and the expectations you will be under as the owner.
It is also worthwhile to consider that if purchasing an off-plan property, no rental will be generated until the property is fully constructed. While off-plan purchases often provide some of the best deals to buyers, as the prices are more often than not below market value, a good amount of capital growth can be obtained upon the completion of the construction process.
When buying in an unfamiliar foreign market, many investors opt for developments with a guaranteed rental period, enabling them to be assured of an income during a set amount of years. Some re-sell the property after the guaranteed period has expired, while others continue to rent the property through their own advertising or buy using a local agent.
There are many options in the buy-to-let market and many markets to choose from. Using a good agent to provide assistance and advice can offer other possibilities that the purchaser may not have previously considered.