Historically, property has proved a good investment for long-term returns. Rental yields typically run at around 5% - 7% dependent on location of a properties value.
Despite the credit crunch and the threat of house price falls, current conditions still favour the rental market. High levels of immigration and the increasing number of people being priced out of the housing market have helped to maintain significant demand for rental properties.
When you purchase a property to rent out you are becoming a landlord and will be running a small business. You will require a Buy To Let mortgage which is used to purchase the property that is to be rented out as a source of income.
Finding the right property is key to the success of your long term investment strategy. You will need to research the size and type of property, having a comprehension of what is in demand and what rental income you can expect to obtain. It is worth getting advice from experienced letting agents who will know the local market and where such demand is.
It is important to consider the source of your funding, to see an indication of how much you may be able to borrow; this will enable you to focus your time on properties within your budget.
Your property may be repossessed if you do not keep up repayments on your mortgage .
There may be a fee for mortgage advice. The precise amount of any fee will depend on your own circumstance, but typically this could be 0.5% of the amount borrowed.
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that the rental income will be sufficient to meet the cost of the mortgage.
Charles Cameron & Associates Limited is an appointed representative of Legal & General Partnership Services Limited, which is authorised and regulated by the Financial Services Authority for advising on and arranging mortgages and insurance.
Charles Cameron & Associates Ltd. Blackfriars Foundry, 154-156 Blackfriars Road, London SE1 8EN. Registration No. 04966796.