Buy-to-let is one of the most popular methods for making money out of property in the UK. The process of traditional buy-to-let is very simple – you will purchase a property (usually an apartment) and rent it out to tenants in order to generate rental income. This could either be a student or residential property or commercial property. Some investors also choose more short-term buy-to-let strategies, such as buying Airbnb properties for holiday let, although residential and student buy-to-let is the preferred option as it brings consistent returns all year round. The reason that buy-to-let is considered such a good investment strategy is because of the potential to make large amounts of money from both rental income and capital growth. It is for this reason that buy to let is seen as a great way to boost your savings, according to the Big Investment.
The UK housing market and rental market are thriving, with rising rental costs and increasing demand being seen across major property cities. For those wondering how to make money from buy to let, rental yields are your answer. When you invest in a buy-to-let property, you’ll receive rental returns on a regular basis, often guaranteed if you purchase the property with an investment company.
In certain top-performing areas such as North West cities, Liverpool and Manchester, increasing tenant demand has led rental costs to rise. In the last five years, the average Manchester property has increased by a whopping 36.41%, with a 20-year growth rate recorded of almost 320% – the highest out of every major UK city. This is possibly down to the increasing population of young professionals and students – the most popular tenant groups for UK property. It is for this reason that if you want to know how to make money from buy-to-let properties, you should make sure you research the best buy-to-let areas to reap the full benefits of your investment.
How To Make Money From Buy to Let Rental Properties
To understand how to make money from a rental property, you should make sure you buy a property in an area where rental costs are high but property prices are low. This allows you to generate the most attractive rental yields for your investment. A good example of this kind of city is Liverpool, where rental yields can reach almost 9% in some areas, and the demand for rental properties is high.
- Once you know the tips and tricks of how to make money from rental properties, you can make a regular and guaranteed rental income.
- On top of rental income, you can make significant capital growth returns if your property grows in value by the time you sell it.
- You can often use a buy-to-let mortgage to help you pay for the investment.
- You can make your investment from anywhere in the world. For instance, if you don’t live in the UK, you can still invest in UK buy-to-let by enlisting the help of a property management company that will take care of the property for you.
- If you can’t find a long-term tenant for your property, you could suffer from a loss of income.
- Rental yields and capital growth can differ depending on the area you invest in.