First things first, what is buy-to-let? Put simply, buy-to-let, often also known as invest-to-let, is a term that refers to purchasing a property to let out to a tenant to make rental income.
Let’s explore the definition of buy-to-let and the basics of these investment properties in a bit more detail.
What is Buy-to-Let Property?
A buy-to-let property is a property that has been purchased by an investor to be let out to tenants.
Buy-to-let investors buy a property and make money from the rent paid by their tenants. When buying a property to let, you can either purchase it outright or with a buy-to-let mortgage.
What Does Buy-to-Rent Mean?
Buy-to-rent in the UK has the same meaning as buy-to-let – it’s when someone owns a property and rents it out to tenants to generate regular income.
Buy-to-rent is simply an alternative piece of terminology that’s often used. Buy-to-rent has the same meaning as buying a property to let.
What are Rental Yields?
Rental yields are a percentage that indicates the return on investment you can expect from a buy-to-let investment property.
A rental yield of 5-6% or above is often considered desirable, and when looking for a buy-to-let opportunity, rental yields are one of the main things investors focus on.
Can You Live in Your Buy-to-Let Property?
When you buy a property for buy-to-let purposes, it’s not usually possible to live in the property.
This is because many investors will use a buy-to-let mortgage to pay for their purchase, and the majority of mortgage lenders and mortgage broker’s deals don’t allow this.
However, those who purchase a buy-to-let investment property without seeking a mortgage deal are free to live in their property if they please.
Learn more about the question ‘Can I live in my buy-to-let property?’ with our helpful guide filled with information.