Buy-to-let investment is very different from owning your own home.
When you become a landlord, you’re effectively running a small business – one with important legal responsibilities.
How does buy-to-let property investment work?
To buy a residential property, you can use your own cash or take out a buy-to-let mortgage with a cash deposit.
Keep in mind that a mortgage comes with risks – if you need to sell the property for a loss, the sale price might not cover all that you owe on the mortgage.
You would need to make up the difference.
Also remember, that if your tenants leave and there is no rent coming in, you still need to make your mortgage repayments.
Once you buy a property, you can potentially earn a profit in two ways:
- Rental yield – what your tenant(s) pay in rent, minus any maintenance and running costs, like repairs and agents fees.
- Capital growth – the profit you earn if you sell your property for more than you paid for it.