How do people earn more from buy-to-let property?
Buy-to-let. This simple idea became a well known property-purchase method that allows you to rent to tenants while you repay the loan. But this isn't all there is to know about buy-to-let - not by a long way.
As Affirmative provides finance for all kinds of property matters, we thought we would look over where buy-to-let stands in 2014. This meant looking at what came before, and how things progressed, in order to find out if buy-to-let is a viable way to raise more revenue in the future. Let us explain.
Fast history of buy-to-let loans
Some say it was coined as a marketing word for a particular kind of mortgage. But whatever the case may be, in the 1990s buy-to-let arrangements appeared and gave investors the power to borrow money for properties which they could let out to tenants.
Popularity grew over those years. It peaked between 2000 and 2007, by which point some of the largest banks had started lending such as HBOS and RBS. After this peak, the market dropped dramatically — from £27.2 billion in 2008, to £8.5 billion in 2009.
Since then, new regulation has been introduced to protect consumers. But buy-to-let is still a force in the housing market – with the first investment fund of its kind launched in November 2014 – and many are still making millions as buy-to-let landlords.
Buy-to-let in practice
With its brief history behind us we can look towards how individuals are succeeding with this method in recent times. In general, buy-to-let can still lead to a number of profitable ventures for landlords and we can look at an example to see this in action.
Speaking with the Telegraph, Graham White, a successful buy-to-let landlord with a development portfolio worth over £1 million, shared his secrets. The best may increase the potential for filling the property and can be summarised as follows:
- Buy something new
- Look for properties which are more 'lettable'
- Look outside of your hometown
- Make sure the area has a healthy market for tenants
- Avoid run down areas
Following the above tips can help landlords to fill their properties. But if you have not yet acquired a property or need to raise the funds. What are the options for you?
What it means here and what you can get
While it is possible to enter a buy-to-let mortgage, there are situations where this might not be available, or may fall through at a crucial moment. If you need fast funding, a bridging loan for commercial property or unmortgageable property can help you to complete the deal.
Typically, a bridging loan is seen as a source of funding when the problem is a gap in a property chain — however you can borrow from Affirmative Finance in many other situations in order to surmount the obstacles and realise your special project.
To find out if a bridging loan of between £10,000 to £5 million is right for your buy-to-let project call our Manchester office on 08000 44 84 84.