What is a buy to let investment?

Buy to let investment is basically a concept in which you buy a property and then rent it out to tenants. Buy to let investment is basically a concept of running a small business. Once you will buy a property then you will get profit on it. The profit can be earned in two ways:

  1. Rental yield

  2. Capital growth

Rental Yield

The rent paid by the tenants is a rental yield.

Capital Growth

If you sell your property and get more money than the profit which you earn is a capital growth.

Risks

There are some risks in buy to let investments and property investment uk. These are as follows:

  1. If you can’t find tenants then you are not able to cover your mortgage repayments.

  2. If the price of your house falls then the value of your property falls as well.

  3. If you find some difficult tenants then it will make a problem for you to deal with them.

Charges

The maintenance and running costs is also taken from tenants. When you sell your property then it will be compulsory for you to pay the legal and marketing fees. In order to make the property safe and secure you need to take building and landlord insurance. Buy to let investment is basically a concept in which you buy a property and then rent it out to tenants. Buy to let investment is basically a concept of running a small business. Once you will buy a property then you will get profit on it. The profit can be earned in two ways:

  1. Rental yield

  2. Capital growth

Rental Yield

The rent paid by the tenants is a rental yield.

Capital Growth

If you sell your property and get more money than the profit which you earn is a capital growth.

Risks

There are some risks in buy to let investments. These are as follows:

  1. If you can’t find tenants then you are not able to cover your mortgage repayments.

  2. If the price of your house falls then the value of your property falls as well.

  3. If you find some difficult tenants then it will make a problem for you to deal with them.

Charges

The maintenance and running costs is also taken from tenants. When you sell your property then it will be compulsory for you to pay the legal and marketing fees. In order to make the property safe and secure you need to take building and landlord insurance.

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