subject: Buy To Let Investment What You Need To Know About It [print this page] At the present time, there is a kind of mortgage loan available for anyone who wants to buy a property to be rented. What started out as a business for landlords who are making investments in residential properties is now a source of new business for mortgage companies as well as the buy to let investment business is getting more and more popular.
Buy to let is basically involves the purchase of a residential property for the purpose of having it rented. It is also a term that refers to the kind of mortgage loan made to help with buying the said property. The increase in the demand for rental property made this new business in the real estate industry a booming source of profit for a lot of investors.
There is a good number of benefits available for an investor who gets into the buy to let business. One can be assured of a stable monthly income from rent. In addition to that, there is the accumulation of wealth as the house prices go up. In fact, this has become a popular investment in the UK.
As with all business investments, this venture also comes with its own set of risks. One of which is a failure in the assumed fact that the property is going to end up more valuable over time. Another is all about earning enough in rent to cover the maintenance costs as well as part of the whole cost of purchasing the property.
The history of buy to let investment goes a long way. It was initially coined in 1995 in an initiative created by the Association of Residential Letting Agents, but this kind of lending has been there for a number of years already. It was strengthened by the abolishment of the tenure for tenants in the 1988 Housing Act, which provided security for landlords.
By 1997, there was a boom in the buy to let industry as proven by statistics collected by the Council of Mortgage Lenders. Over time, new players in the lending industry started to specialize in financing this specific venture.
Attractive pricing has been the main asset of lenders who are helping out investors in the buy to let business. There is also a large activity going on within the refinancing world as most of these endeavors are switching to less expensive mortgage lenders from their original source. At the present time, there is an average of 16 years for most property investments people are getting into, including buy to let ones.
A good amount of criticisms has been made against this specific sector of the real estate industry. Apparently, it has been found to contribute largely to the house price inflation happening all over the country. In August 2007, Oxford Economics was quoted to have stated that this business has absolutely been contributing to the overvaluation of housing.
Despite such negative publicity for buy to let investment, there are still an increasing number of individuals who are taking the risks of the business and buying off residential properties for letting purposes. The profit this business has to offer has proven to be enough motivation for the moneymaking bunch.
